Sale of inherited stock reported as short term on 1099-B

[Doug522]

I received a 1099-B for the sale of stock that I inherited. On the 1099-B it is reported as a short-term transaction (Box A checked).  Based on when I acquired the stock and sold it that would be correct, but my understanding is that inherited stock should be considered long-term.

In TurboTax, if I leave the “Sales section” as “Short-term basis reported to IRS (covered)” (it does say this should match my 1099-B exactly), and select “I inherited it” from “How did you receive this investment?”, TurboTax still seems to be treating this as a short-term holding.  I can change the “Sales section” to long-term and that changes the tax burden.  But then this won’t be consistent with what was reported on my 1099-B.  I had hoped that TurboTax would do the right thing since I indicated that I inherited the stock.

What should I do?

Thanks in advance!

[Mike9241]

You are correct. Inherited stock automatically gets long-term treatment.  The date acquired is the date of death and the tax basis is adjusted to fair market value. First, contact the firm to see if they'll correct the 1099-B. If not on the 8949 for the date acquired type "inherited" also use adjustment code T.  

[Doug522]

Thank you for the quick reply!  TurboTax won’t let me type anything in column (f) of Form 8949.  How do I get the “T” in there?  I’m using TurboTax Premier on a Mac, downloaded version.

[Doug522]

Never mind, I found it on the Capital Assets Sales Worksheet.