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Another Cost Basis Question

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    Another Cost Basis Question

    Must a step-up election of cost basis in an inheritance situation in a marital property state (WI) apply to all assets acquired ?
    Customer's wife died April 2021. They jointly owned their home, a brokerage account and a valuable lake property with a fairly low cost basis.
    Most of his stocks have modest gains but one of the stocks in the brokerage account is held at well below its cost ($30K or so loss).
    The brokerage says if he elects to step up the account, all stocks in the account must be stepped up (all or nothing).
    He wants to sell the losing stock before 12-31-21 & take the loss on it, so the "step up" would not seem like a good idea for the brokerage account.
    My question is, if he does not step up his brokerage account, does this have any effect on the "step up" he may be entitled to on his lake property ?
    Thanks for comments

    I'm not sure where the thought is that it is an election. It is not an election.

    There is an election for using an 'alternate date' for Estate tax purposes. Maybe that is what is being referred to?



      Step up/down on DOD or alternate date. No election re step up/down. Do not take tax advice from a broker.


        26 U.S. Code ? 1014 - Basis of property acquired from a decedent. (a)In general Except as otherwise provided in this section, the basis of property in the hands of a person acquiring the property from a decedent or to whom the property passed from a decedent shall, if not sold, exchanged, or otherwise disposed of before the decedent’s death by such person, be—
        the fair market value of the property at the date of the decedent’s death,

        I believe the broker is correct in stating all property in account is stepped up/down, but he is incorrect stating that client has a choice, as all property inherited is valued at day of death. It is not an election, and will have no effect on his lake property. Just my opinion, and if it was my client I would not advise him on selling stock, but would do more research


          I don't get it - Why is there this love affair with step up/down? Meaningless terms.

          Terryats gave everyone the correct language -
          the fair market value of the property at the date of the decedent’s death,

          Any reference to the "alternate date" could only apply if the gross value of the estate exceeded $11,700,000 in 2021. Section 2032 requires a taxable estate for alternate valuation to apply. There's no indication that this applies to the original poster's situation.