Taxpayer sold off all his mutual funds that he & his spouse had bought 10 years ago. The spouse passed away in July and he sold off all the mutual funds in September. How would I figure his cost basis?
If I figure the cost basis of his 1/2 and then take the other 1/2 at value of her DOD, then there would be more of a gain. Usually when I do it this way it is half "stepped UP" in basis. But with the economy it would be a "stepped down" in basis then he would have more gain.
So my question is what is his basis? Is there a choice? Can we take all "their" basis, or do I have to do his 1/2 and then value on her DOD which would actually be stepped down in this case.
If I figure the cost basis of his 1/2 and then take the other 1/2 at value of her DOD, then there would be more of a gain. Usually when I do it this way it is half "stepped UP" in basis. But with the economy it would be a "stepped down" in basis then he would have more gain.
So my question is what is his basis? Is there a choice? Can we take all "their" basis, or do I have to do his 1/2 and then value on her DOD which would actually be stepped down in this case.
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