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Inherited stocks from grandparent with no cost basis. How to determine if client does not know.

bgoldsmith
Level 2

I have a client who sold stock this year but the 1099-B does not have a cost basis. However, on the 1099-B , there is a date shown in the date acquired column and the form also shows the # of shares. How would I calculate the cost basis... Do I look up the historical price for that stock on the date it was acquired and then multiple that price by the # of shares to calculate the price? Or option B, do I look up the historical price of the stock on the date the stock was inherited by the grandson, and do the calculation on that date?

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IRonMaN
Level 15

Ask the investment guy or gal for help.  If they wont' do that, go back to the date of death and look at the historical cost on that date.  Just be careful to factor in any stock splits that may have happened between then and now.

ACME Taxes, Tatoos, Tires and Tomatoes (I had to get rid of the turtles - they kept running away)
jeffmcpa2010
Level 8

You said inherited...If that is correct, the stock basis would be as of the Date of Death of the person who's estate distributed it to your Client. This may or may not be correct as the date acquired.

If their Investment advisor won't help, I have had luck working with someone local that I have a relationship (Investing with) to get the information.

BTW if their advisor won't help, I normally recommend that they promote him to their ex investment advisor.

 

BobKamman
Level 15

"Date acquired" is often not the date of death -- it's the date the shares were moved to Broker C after spending some time with Broker B, who acquired them from Broker A.  And of course, it's either date of death or alternate valuation date (just flaunting my age).