Alternative cost basis determination for survivor JTWROS brokerage account

[FEDUKE404]

Never mind.

[kathyc2]

QUESTION #3 - (For the number-crunchers out there with considerably more skills than myself!) Do the two valuation methods (traditional vs alternative) essentially generate the same overall [total] cost basis?

If the cost basis for all is less than DOD value, you should get the same result. If cost basis for one is more than DOD value, results can be different. Example: Hold 2 shares of stock- one purchased at 10 and one at 25. DOD value is 20. Using your method total value would be 40 (15 + 25). Average purchase price is 17.50 and with step up total would be 37.50.

[ATSMAN]

I had to do this calculation only once for a family member so I am a bit rusty. If I recall correctly this is how it was done.

Assume Husband and Wife jointly own 100 shares of ABC and they paid $10 per share. The cost basis is $1000

On Husband's DOD share price was $20 and widow sells the entire lot at $25 per share

1) Gross proceeds (100 x 25) = $2500

2) Widow's basis (50 x 10) = $500

3) Stepped Up Basis (50 x 20) = $1000

4) Total adjusted basis (500+1000) = $1500

5) LT CG (2500-1500) = $1000

Check (10 + 20)/2 = 15 x 100 = $1500 (same as #4)

[Burke]

I know basis information has to be supplied to taxpayers now, but I believe it is only after a certain date, and if accounts were transferred to another brokerage then #2 is not responsible for basis prior to any purchases made through Broker #2. Also, does the IRS really match these basis figures as reported? I believe there is a way to use what is reported, and then use the adjustment column on Form 8949 to reconcile to your figures , is it not? I wouldn't lose a whole lot of sleep over it. I think you have done due diligence. I would not hold my breath waiting for Broker #2 to adjust their numbers and issue a new 1099.