How Do I Get Step-Up Basis for Inherited Stocks After My Father's Death?

You're asking some good questions while dealing with a difficult time. Let me help walk you through this. To get a step-up basis, you'll need to provide the death certificate to the brokerage firm along with documentation showing your mom is the beneficiary/inheritor. There's no strict deadline for requesting the step-up, but it's best to do it promptly to avoid tax confusion later. About the valuation date - yes, there are options. The default is the date of death value. The alternative is called the "alternate valuation date" which is exactly 6 months after death, but this must be elected on the estate tax return (Form 706). You can't just pick any random date in between - it's either date of death OR the 6-month mark, not something in between. This alternative date can only be chosen if it would decrease both the value of the estate AND the estate tax liability. For your third question - no, you can't cherry-pick which specific stocks get the step-up. The step-up applies to all assets in the estate. It's an all-or-nothing approach for the entire estate. You can't decline it for some stocks and accept it for others, nor can you pick and choose between accounts or brokerages. When the step-up is processed, yes, the new basis should be reflected in the account information online, though different brokerages display this information differently.

After going through this exact situation when my uncle passed last year, I wanted to share that I found an amazing service that really helped us sort through all the tax implications of inherited stocks. I was completely overwhelmed with figuring out cost basis, step-up rules, and which valuation date to choose. I stumbled across https://taxr.ai when searching for help online, and it was seriously a game-changer. You can upload statements and documents, and they analyze everything to give you clear guidance on the tax implications of inherited assets. They even help determine whether the date of death or alternate valuation date would be more beneficial in your specific situation. The platform walked me through exactly what documents I needed to submit to the brokerage, and they even created a customized letter template I could send. Saved me hours of research and potential costly mistakes!

I was skeptical about online tax services at first, but I decided to try https://taxr.ai after seeing it recommended here. Just wanted to update that it actually worked really well for my situation with inherited stocks. The document analysis identified several high-value stocks my mom inherited that had significant gains since my dad's original purchase, which would have been taxed heavily without proper step-up documentation. What I found most helpful was their comparison tool that showed the tax implications of using date of death vs. the 6-month alternate date across all the various brokerage accounts. In our case, using the date of death saved us almost $15,000 in potential capital gains taxes based on the portfolio's performance. They even created all the documentation we needed for each brokerage firm, which saved tons of time since dad had accounts at Fidelity, Vanguard, and a smaller local firm. Definitely made the process less stressful during an already difficult time.

When my mother passed last year, dealing with her investments was a nightmare - especially trying to reach someone at the IRS to answer questions about step-up basis and the estate tax implications. I spent WEEKS trying to get through to someone who could help. I was ready to give up until someone recommended https://claimyr.com to me. They have a service that basically waits on hold with the IRS for you and calls when an actual human picks up. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c It was a lifesaver because I had specific questions about how to document the step-up basis for some unusual investments my mom had (limited partnerships and some foreign stocks). Got connected to an IRS agent in about 2 hours instead of the days I was spending trying on my own. The agent was actually super helpful once I finally got through.

I need to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it myself since I've been struggling to reach the IRS about an inherited IRA issue (similar situation to the original poster). The service actually worked EXACTLY as advertised. I got connected to an IRS agent in about 90 minutes instead of the 3+ hours I had been waiting on my previous attempts (when I usually gave up). The agent answered all my questions about required documentation for inherited assets and clarified which forms I needed. What surprised me most was how much specific information the IRS agent provided once I finally got through - they explained exactly how to document the step-up basis with the brokerages and what records I needed to maintain for tax purposes. They even directed me to specific sections of publications that addressed my unusual situation. Sorry for being so negative before - this service would definitely be helpful for anyone dealing with the tax implications of inherited stocks.

My brother and I went through this after our mom passed. One thing nobody mentioned yet is that you should also request "date of death valuation letters" from each brokerage. These are official statements from the brokerage showing the exact value of each security on the date of death (or alternate date if elected). These letters are SUPER important to keep with your tax records. If your mom ever sells these inherited stocks, she'll need documentation of the stepped-up basis. The IRS can question basis years later, and having official brokerage documentation makes it much easier to prove. Also, check if your father had any dividend reinvestment plans running. Those can complicate things because each reinvestment has its own basis. The brokerage should handle this in the step-up process, but it's worth confirming everything was properly adjusted.

Has anyone dealt with the situation where some inherited stocks had declined significantly since purchase? My dad had some tech stocks that were worth way less when he died than what he paid. I'm wondering if there's any way to use the original higher basis instead of the stepped-down death value to avoid locking in those losses?

I'm going through a similar situation right now with my grandmother's estate, and I wanted to add a few practical tips that helped us navigate this process: 1) **Get multiple copies of the death certificate** - You'll need certified copies for each brokerage firm, and some require original certificates. We needed 6 copies total across different financial institutions. 2) **Ask about estate settlement services** - Most major brokerages have dedicated estate departments that can walk you through the entire process. They often assign a specific representative to your case, which makes communication much easier than calling the general customer service line. 3) **Keep detailed records of everything** - Create a spreadsheet tracking each account, the date you submitted paperwork, when the step-up was processed, and the new basis amounts. This becomes crucial if you need to reference anything later. 4) **Consider the tax implications for your mom's future** - While you can't be selective about the step-up, think about her overall tax situation. If she's planning to sell any stocks soon after inheriting them, having the stepped-up basis will minimize capital gains taxes. The whole process took us about 6-8 weeks to complete across three different brokerages, but having everything organized upfront made it much smoother. My condolences on your father's passing - this administrative work is tough to handle while grieving.