Adding an inherited stock

Jazimm · November 20

I have inherited a stock that was purchased in 2013. When adding it in to an offline brokerage account as "add shares" the cost basis remains as the market value. How do I correct this?

Jim_Harman · November 20

When you inherit a security, the cost basis is generally "stepped up" to the date of death. The original purchase date does not matter.

If the security is new to you, it is best to go to Tools > Security list and click on Add Security to add it to Quicken.

Then in the receiving account, click on Enter Transactions and select Add - Shares added. Next to Transaction date, enter the date you received the shares. Select the security and enter the number of shares you received. Leave the Price paid blank.

Next to Total cost, enter the total value of the holding on the date of death and let Quicken calculate the price per share. Next to Date acquired, enter the date of death.

With these entries, the increase in your net worth and your cost basis should be set correctly.

The rules are different if you received the shares as a gift or if they were received from a trust.

Disclaimer: I am not a tax advisor, you should consult your tax advisor.

Jim_Harman · November 20

When you inherit a security, the cost basis is generally "stepped up" to the date of death. The original purchase date does not matter.

If the security is new to you, it is best to go to Tools > Security list and click on Add Security to add it to Quicken.

Then in the receiving account, click on Enter Transactions and select Add - Shares added. Next to Transaction date, enter the date you received the shares. Select the security and enter the number of shares you received. Leave the Price paid blank.

Next to Total cost, enter the total value of the holding on the date of death and let Quicken calculate the price per share. Next to Date acquired, enter the date of death.

With these entries, the increase in your net worth and your cost basis should be set correctly.

The rules are different if you received the shares as a gift or if they were received from a trust.

Disclaimer: I am not a tax advisor, you should consult your tax advisor.

Jazimm · November 21

Thank you. I was able to get the market value updated. Sadly most of the stock I inherited did not step up because it was held in JTWROS from the 80's and 90's. I added the actual date the stock was acquired but the cost basis is out of whack for most of the shares. Maybe I'll just reenter it from the online source once I have a statement. Do you know how to correct the cost basis in this type of case?

Thanks again for your help.

NotACPA · November 21

@Jazimm You state that the stock was JTWROS. Were you that "Joint Tenant"?

If so, I believe (and I'm not a tax advisor either) that you're considered to have owned the entire amount of the stock since the original date(s) of purchase, which is why no "step up at death" occurred.

Thus, it becomes a question of how a-retentive/precise you care to be when weighed against the effort involved.

The maximum-effort/maximum-gain approach would be to "Shares Add" every individual lot with the original quantity, date and dollar amount.

The much easier approach would be to input the entire amount in a single transaction using the date of death, quantity at that time and dollar amount at that time.

Adding an inherited stock

Best Answer

Answers

Categories