cost basis of inherited accounts

[perinova]

Assuming no inheritance tax, the higher the basis the better.
How is the basis of non-probate TOD financial accounts such as Vanguard/Fidelity/etc adjusted?

Is it on the account transfer date or time-of-death or you can choose a date 6-months passed the death?

Other related question: If I am reading a previous thread correctly that the total basis is adjusted if there is a death of a JTWROS owner? (This includes house and financial accounts?)

 

[audreyh1]

I believe the prices are set on the date of death, not any time afterwards.

The entire JTWROS account receiving a stepped up basis in the event of spouses death, I believe that is true for community property states. So you need to know your state situation and make sure the accounts are correctly registered.

 

[cathy63]

The executor of the estate can elect the alternate valuation date of 6 months after the date of death only if it decreases the value of the estate and reduces the estate tax. If the estate in question is not subject to estate tax, then the executor cannot use the alternate date.

If an alternate valuation date is not used, then step-up is supposed to occur as of the date of death.

If an alternate valuation date is used, then step-up is on the later of the transfer date or the alternate valuation date.

JTWROS property only gets a full step-up if the two owners are spouses and they live in a community property state. Otherwise it's a half step-up.

 

[SecondCor521]

Depending on how you meant the first question, the executor can just contact the brokerage company and tell them to step up the basis to date of death (most commonly; see @cathy63's comments above).

Vanguard did this for my Mom's taxable assets. In her case, since they were joint with my Dad and they lived in a community property state, the entire account received a full step up in basis.

For stocks it's the average of the high and the low for the most recent trading day; for mutual funds it's closing price on the most recent trading day. For other assets I'm not sure how it works.

Also, inherited assets get long term capital treatment regardless of holding period by the decedent or the beneficiary.