Inherited Stock Cost Basis vs. Broker Monthly Statement and Tax Filing

Forum|Forum|2 years ago
June 1, 2023
1 reply
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I am familiar with inherited stock having its cost basis based on the date of death. I am also familiar with taking the high and low on that day to determine the average as the new cost basis. I have kept detailed and accurate records in this regard.

However, my monthly statements still reflect the old cost basis. Merrill admitted they were supposed to adjust that at TOD, but failed to do so and now in order to correct it, they suggest I send a 3rd party company my father's last statement and of course pay a fee per security. The company states I can "email" them that information (which does not sound very secure to me.) Supposedly this would be used by Merrill to correct my monthly statements to the new cost basis.

But I have to wonder based on all what I have read on the Internet if this effort is really needed. I am sure I am not alone in this type of situation. Will the IRS accept a person's tax return if they use the cost basis they determined is accurate from for example Yahoo's Historical Data? ---Even if Merrill in this case sends them at tax time a different cost basis -- the original no doubt.

Thoughts on this would be greatly appreciated.

Bsch4477

Employee

If audited the IRS should accept documentation that supports your reporting of the cost basis.

Mike9241

rediculous of ML. Anyway this is what form 8949 says to do if cost basis is wrong - use code B and

• If this transaction is reported on a Part I with box B
checked at the top or if this transaction is reported on a
Part II with box E checked at the top, enter the correct
basis in column (e), and enter -0- in column (g).
• If this transaction is reported on a Part I with box A
checked at the top or if this transaction is reported on a
Part II with box D checked at the top, enter the basis shown
on Form 1099-B (or substitute statement) in column (e),
even though that basis is incorrect. Correct the error by
entering an adjustment in column (g).

also for date acquired use the dropdown or type in - inherited

NCPERSON1

@Themushj that sounds "crazy". Have you discussed with your FA at Merril? Or have you called the 800 number and requested the call be escalated (they front line associate will do that without hesitation as it is part of their protocol).

Discuss with the supervisor. On the Bank side, they have an entire department called "estate" to handle matters after someone passes (close bank accounts, get cash to the beneficiary, etc.) I suspect they have similar on the Wealth Managment side. I can't believe the Bank doesn't do what you are requesting as a normal course of business on any publically traded holding.