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Step-up in cost basis

In addition to my own Quicken file, I also have files for some elderly relatives. It occurred to me that, at some point in the future, their estates will likely experience a step-up (or step-down) in cost basis when one of them passes away. I'm thinking I'll need to remove shares and then add the same number of shares back with the adjusted cost basis. It's a little tedious but not out of the question. Is there a better way?

Best Answer

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Accepted Answer
    " It's a little tedious but not out of the question. Is there a better way? "
    It shouldn't be all that tedious unless the elderly relatives have hundreds of different securities.  One Remove and one Add should be all it takes since the shares added are now all the same "lot."  (This is for the situation when one spouse dies and the shares are inherited by the surviving spouse.  You'd want to keep the activity in the same Quicken file the couple shared.)
    If you're talking about a situation where you inherit shares you could simply do one Add per security in your file as, again, "lots" go away.
    Personally, when I inherited some securities from my mother I took a slightly different path.  For each security I "deposited" cash equal to the security's value into my brokerage Account using an "Inheritance" Category and then "bought" the correct number of shares to come to that value.  The only problem with that approach is that the inherited shares are considered long term as a matter of tax law and if I'd sold any of those shares within one year of the DoD - I didn't - I'd have to remember that the gain or loss was really "long term" for tax purposes.

Answers

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Accepted Answer
    " It's a little tedious but not out of the question. Is there a better way? "
    It shouldn't be all that tedious unless the elderly relatives have hundreds of different securities.  One Remove and one Add should be all it takes since the shares added are now all the same "lot."  (This is for the situation when one spouse dies and the shares are inherited by the surviving spouse.  You'd want to keep the activity in the same Quicken file the couple shared.)
    If you're talking about a situation where you inherit shares you could simply do one Add per security in your file as, again, "lots" go away.
    Personally, when I inherited some securities from my mother I took a slightly different path.  For each security I "deposited" cash equal to the security's value into my brokerage Account using an "Inheritance" Category and then "bought" the correct number of shares to come to that value.  The only problem with that approach is that the inherited shares are considered long term as a matter of tax law and if I'd sold any of those shares within one year of the DoD - I didn't - I'd have to remember that the gain or loss was really "long term" for tax purposes.
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    How odd.  Over in the post you cite I'm both "Unknown Member" and "Generic Quicken User."  I guess that post originated two forum providers ago.

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    Tom Young said:
    How odd.  Over in the post you cite I'm both "Unknown Member" and "Generic Quicken User."  I guess that post originated two forum providers ago.

    @Tom Young

    I suppose we should be happy the post hasn't been archived yet.

  • Mark1104
    Mark1104 Member ✭✭✭✭
    edited August 2020
    [Removed-Specualation/Disruptive]

    suggest enjoying your parents while they are alive. and deal with the Quicken when the time comes.    
This discussion has been closed.