Does TurboTax handle the step up in basis on death of spouse automatically for stocks?

Forum|Forum|2 years ago
March 10, 2024
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My husband died in 2023. I understand that the stocks that we owned in a joint account should receive half of a step up in basis. I sold all the stocks a few weeks after his death.

I've imported my forms directly from Fidelity.

TurboTax has asked when my husband died, etc., but in reviewing the completed tax forms, I cannot seem to find where TurboTax has accounted for the half step up in basis. As far as I can tell, it hasn't done this.

Question: Does TurboTax account for the step up in basis on stocks on death of a spouse?

Q2: If so, where?

Q3: If not, how does one go about this in TurboTax?

Much appreciated!

Best answer by Anonymous_

@therosefl wrote:

So the step up in basis should already be reflected in the 1099-B from Fidelity?

You would have to contact Fidelity in order to make that determination.

Considering it is most likely a joint account, the step up is probably not reflected in the 1099-B.

Further, although you can easily input the stepped up basis into TurboTax, the program does not figure out the stepped up basis automatically (i.e., you need to have that information to input it into the program).

Cynthiad66

Yes, Turbotax handles step-up basis of inherited stocks.

When you sell stocks, bonds, mutual funds, or other securities, you should get Form 1099-B from your brokerage by mid-February. Simply enter the form in TurboTax to report the sale.

But what about nonsecurity investment sales like coins, collectibles, timber, land, or a second home? Here's how you enter those:

Open (continue) your return in TurboTax.
In the search box, search for investment sales then select the Jump to link in the search results.
Answer Yes to the question Did you sell any of these investments in 2023? (or Okay! to Time to kick off your investments!).
- If you land on the Investment sales summary or Your investments and savings screen, select Add More Sales or Add investments.
Follow the on-screen instructions to either import your investment sale info or enter it in your return yourself.

Related Information:

Where do I enter a capital gain or loss?

The step-up in basis provision adjusts the value, or “cost basis,” of an inherited asset (stocks, bonds, real estate, etc.) when it is passed on, after death. This often reduces the capital gains tax owed by the recipient.

Cost Basis of Stocks

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