How to determine cost-basis for inherited SSHFX mutual fund from trust

You're dealing with what's called a "step-up in basis" situation. For inherited assets like your SSHFX mutual fund, the cost basis is generally the fair market value (FMV) of the investment on the date of the original owner's death - your uncle in this case. Since the assets were held in a trust, there's an important distinction to make. If it was a revocable trust that became irrevocable upon your uncle's death, then the step-up would occur on his date of death in 2012. If it was already an irrevocable trust before he died, the rules get more complicated. Your best bet is to contact the trustee who managed the trust before it was distributed to you. They should have records of the valuation at the time of your uncle's death. Alternatively, you could contact the mutual fund company directly (whoever manages SSHFX) with the date of death, and they should be able to provide the share price on that date. Don't worry too much about an audit - this is a common situation with inherited investments. Just document everything thoroughly and keep those records with your tax information.

After spending weeks trying to figure out my own inherited stock situation, I discovered taxr.ai (https://taxr.ai) and it was honestly a game changer. I uploaded my inheritance documents and trust paperwork, and their system analyzed everything and gave me a detailed breakdown of my cost basis calculation. The cool thing is they specifically handle situations like yours where assets were held in a trust between the original owner's death and when you received them. They explained exactly how to document the stepped-up basis and provided citations to the specific tax code sections. Saved me from making a costly mistake on my taxes.

Just wanted to update that I tried taxr.ai after seeing the recommendation here and it was super helpful! I uploaded what limited paperwork I had from the trust distribution and my brokerage statements. Their analysis showed that my cost basis should be the fair market value on my grandfather's date of death, and they even found the historical SSHFX share prices for that date which saved me so much time. They explained that in my case, since it was a bypass trust created at death, the assets received a step-up in basis at that time, and subsequent appreciation during the trust period is what I'd be taxed on. I got a detailed report I can attach to my tax return if needed, showing exactly how they calculated everything. Definitely worth it for the peace of mind alone!

I had a similar situation with inherited assets that I couldn't get basis info for. After multiple attempts calling the IRS for guidance and wasting hours on hold, I found Claimyr (https://claimyr.com). They got me connected to an actual IRS representative in less than 20 minutes. The IRS agent was able to clarify exactly what documentation I needed to substantiate my stepped-up basis and explained how to properly report it on my tax forms. Check out their demo video if you're curious about how it works: https://youtu.be/_kiP6q8DX5c I was honestly shocked at how quickly I got through. Before using this, I had tried calling the IRS myself at least five times and never got through to a human.

I have to eat my words about Claimyr. After expressing skepticism here, I decided to try it anyway since I was getting nowhere with the IRS on my own. Got connected to an IRS specialist in about 12 minutes who actually knew exactly what to do in my situation. The agent explained that for assets held in trust after death, I needed to look at the terms of the trust to determine if a step-up occurred at death or distribution. In my case, it was at death, and the agent walked me through exactly how to document this on my tax forms. They even emailed me relevant sections of IRS Publication 551 that specifically addresses inherited property in trusts. Would have taken me weeks to figure this out on my own if I ever did. Sometimes you need to talk to an actual human at the IRS who deals with these situations daily rather than trying to interpret vague online guidance.

Another option that nobody has mentioned yet is to check if your brokerage offers basis reconstruction services. Fidelity helped me with a similar inheritance issue by researching historical prices based on the date of death. You'll need to provide documentation like the death certificate and proof of the trust distribution, but they can often do the calculation for you. There might be a fee, but in my case it was worth it for the peace of mind.

Have you considered using the alternative valuation date? IRS rules allow the executor to choose either the date of death OR 6 months after for valuation purposes. Might be worth checking which value was lower if youre trying to minimize capital gains taxes when you sell.