Inherited Stocks
Menu Path: Income > Common Income > Investments and Savings (1099-INT/DIV/B/DA)
Enter the sale of inherited stocks or other property on the Stock or Investment Sale Information screen.
If you inherit stocks or other property, your cost basis in the stock will usually be the fair market value of the stock on the date of death. For example, if you inherit 100 shares of XYZ corporation that have a value of $15,000 on the day your loved one passed away, then your cost basis in the stock is $15,000. If you hold the stock for a few months and then sell the stock for $16,000, you would report the sale of stock on your tax return with a sales price of $16,000 and a cost basis of $15,000 for a taxable gain of $1,000.
In very rare scenarios, an executor of an estate may elect to do an alternate valuation 6 months after the date of death to reduce estate taxes. In that scenario the cost basis is the alternate valuation instead of the fair market value at the date of death.
Enter the sale of inherited stocks or other property on the Stock or Investment Sale Information screen.
If you inherit stocks or other property, your cost basis in the stock will usually be the fair market value of the stock on the date of death. For example, if you inherit 100 shares of XYZ corporation that have a value of $15,000 on the day your loved one passed away, then your cost basis in the stock is $15,000. If you hold the stock for a few months and then sell the stock for $16,000, you would report the sale of stock on your tax return with a sales price of $16,000 and a cost basis of $15,000 for a taxable gain of $1,000.
In very rare scenarios, an executor of an estate may elect to do an alternate valuation 6 months after the date of death to reduce estate taxes. In that scenario the cost basis is the alternate valuation instead of the fair market value at the date of death.
