Calculating tax basis for inherited stocks

November 19, 2010

Know how to determine tax basis on inherited stocks

A: If she gifted them to you while she was alive, your basis would be her original acquisition price. However, if she left them to you through her estate, the basis steps up to the fair market value of the securities on the date of her death. But starting in 2010, the step-up for her entire estate cannot exceed $1.3 million. Your mother's executor makes the determination of which assets get stepped up if such gains would otherwise exceed $1.3 million.

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