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Inherited Stock Basis in regards to aquisition costs

Forum|Forum|3 years ago
March 20, 2023
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Typically when selling stock the cost basis can include any aquistion costs or disposition costs in determining the cost basis. I know that inherited stock basis is typically on the date of death, but what if the previous owner paid a premium to originally acquire tht stock. Can the inheritor include these costs in their cost basis.

Thanks in advance

Bill

Not A Product Question

Best answer by Anonymous_

@wjwittenberg wrote:

.....Can the inheritor include these costs in their cost basis.

No. Per Section 1014, the basis is generally the fair market value on the date of death of the decedent for property acquired from a decedent.

See https://www.law.cornell.edu/uscode/text/26/1014

There are instances where the fair market value of the property on the date of death is actually less than what the decedent paid for the property. However, it makes no difference as the property is stepped-up (or stepped-down) to its fair market value on the date of death.

A

Anonymous_Answer

Employee

@wjwittenberg wrote:

.....Can the inheritor include these costs in their cost basis.

No. Per Section 1014, the basis is generally the fair market value on the date of death of the decedent for property acquired from a decedent.

See https://www.law.cornell.edu/uscode/text/26/1014

There are instances where the fair market value of the property on the date of death is actually less than what the decedent paid for the property. However, it makes no difference as the property is stepped-up (or stepped-down) to its fair market value on the date of death.