Section 1231 gains on K-1

[ljjgrant]

I was a shareholder in a bank corporation that was sold in 2020. I had inherited the stock so I have an increase between the cost basis when inherited and the sale price. The corporation K-1 shows an Section 1231 gain on the 1120 S. Is this gain in addition to the gain between cost basis and sale price or part of it?

[M-MTax]

The basis is obviously stepped up to the FMV on the date of death, but you should have kept track of the K-1s you got each year. It can get tricky unless it was handled right from the beginning and it's likely that the gain occurred post-death and not part of your inherited basis.