Stock basis

[fbrcpa]

I have a new, elderly (late 80's), tax client. Her husband died in 1997. They owned stock joint w/ survivorship. I located the estate info and it showed that she received his half of all the stock, with the FMV at death.

This past summer, she went to a financial advisor who suggested she sell a large part of her major holding.

This is the first year I have worked with her.

My problem is what is her basis in the stock she sold. It is a little LESS than half of her entire holding in the stock.

She has no idea when they bought the stock or how much they paid for it. I found bits and pieces of info suggesting they bought it in small lots over a long period of time, probably going back to the 1940's. According to the Co's website, there have been several splits, but I still don't have enough info to even start trying to track it.

The number of shares she had prior to the sale is the same as the estate filing for her husband.

Obviously, the easiest is to take the DOD value since she still has more than half. This will delay the basis problem until the future, unless she dies first, BUT, is it a correct choice?

Is it the same as specifically identifying the shares sold?

We are not in a community property state.

Thanks

[Bird Legs]

Stock Basis

Since she inherited this stock, the basis would be the FMV at date of death.
After tax season you can start working on the basis of her remaining shares.

[S T]

Step Up

If held in joint tenancy, doesn't the survivor only receive step up basis on deceased spouse's stock portfolio. You would have to determine the surviving spouse's cost basis and splits, etc for the other portion.

On a similar situation with a client that turned her investment portfolio over to a financial advisor/stock broker, the t/p and I could not discern basis, so I advised the client since she had a stock broker that was in charge of her investments, it was his obligation to provide her with basis for gain or loss. The broker has better access to stock history than I do, and if I had to go research stock basis I would charge by the hour.

The T/P contacted the financial advisor/stock broker and he is determining the basis for gain/loss for the 2006 stock transactions.

Good Luck!

Sandy

[Davc]

Since she inherited this stock, the basis would be the FMV at date of death.
After tax season you can start working on the basis of her remaining shares.

Specific identification requires that you notify the broker prior to the sale in writing. Also, since these were jointly owned shares the DOD basis is only applicable to 1/2 of each share. You're not allowed to assume that for every 10 shares 5 received DOD value and the other 5 were unchanged.

[veritas]

Once I recall

having a client with stock and no idea of the cost basis. I know we are told the basis is zero if it can't be established. However you could look at the entire history of the stock and use the lowest traded price in the corporation's history.