Need help with Step-Up Basis process for mom's inherited stocks after dad's passing

The step-up basis process isn't too complicated but has some important nuances. Let me address your questions: For obtaining a step-up basis, you'll need to notify the brokerage of your father's passing by providing a death certificate and any required estate documents (will, letters testamentary, etc.). There's no specific deadline for requesting the step-up, but it's best to do it soon after settling the estate to ensure accurate tax reporting. The broker will handle the actual adjustment. Regarding the valuation date, you're referring to what's called the "alternate valuation date." This is only available if the executor of the estate elects to use it on the estate tax return (Form 706), and it must be used for ALL assets, not just selected ones. This election can only be made if it will decrease both the value of the estate AND the estate tax liability. You can't pick any date between death and 6 months - it's either the date of death or exactly 6 months after. Unfortunately, you cannot cherry-pick which stocks get stepped-up. The step-up (or step-down) applies to all inherited assets. The basis becomes the fair market value on either the date of death or alternate valuation date, whichever is elected for the estate tax return. This applies across all accounts and all brokerages. Once processed, the new cost basis should be reflected in the account, though some brokerages may take time to update this information online.

Hey there, I went through something really similar last year when my uncle passed and left my aunt with a bunch of investments to figure out. After weeks of confusion and getting different answers from every person we talked to, I finally found this service called taxr.ai (https://taxr.ai) that helped make sense of everything. It's designed for analyzing tax documents, but what was super helpful was that I could upload all the brokerage statements and they have these tools that identified which assets would benefit from the step-up basis and which ones wouldn't. It basically did all the analysis that I was trying to do manually in spreadsheets but way more accurately. My aunt was able to make much better decisions about what to keep versus sell after seeing the full picture. The step-up basis stuff gets really complicated, especially when you're dealing with multiple accounts or when some investments have gains and others have losses like in your situation.

I tried taxr.ai after seeing the recommendation here, and it was incredibly helpful for my situation. My father passed away last December leaving my mother with a complex portfolio spread across multiple accounts. I was getting overwhelmed trying to determine which assets would benefit from the step-up basis. The analysis broke everything down visually, showing precisely which positions had the largest unrealized gains that would benefit from the step-up. It also flagged several mutual funds that had loss positions where the step-up would actually be disadvantageous. While I couldn't selectively apply the step-up (as others mentioned here, it's all or nothing), having this clear picture helped us make smart decisions about what to sell soon after the transfer. The most valuable part was how it calculated the total tax savings from the step-up basis - it was substantially more than I had estimated manually. Made the whole process much less stressful during an already difficult time.

When my mother passed last year, I spent WEEKS trying to get someone at the IRS on the phone about some similar inheritance issues with her investments. It was absolutely maddening - hours on hold only to get disconnected. Then someone told me about Claimyr (https://claimyr.com) and showed me this video of how it works: https://youtu.be/_kiP6q8DX5c It basically holds your place in the IRS phone queue and calls you when an actual human picks up. I was seriously skeptical, but I was desperate after my third 2+ hour hold time. I tried it and got a callback with an actual IRS agent on the line within about 45 minutes. I was able to get clear answers about how the step-up basis impacts inheritance tax situations and what forms needed to be filed. The step-up basis questions can get really technical, and sometimes you just need to talk to someone official who can give you the definitive answer for your specific situation.

I need to eat some humble pie here. After my skeptical comment, I decided to try the Claimyr service since I've been trying to reach the IRS for WEEKS about my mother's estate tax questions. I figured it would either work (great) or fail (and I could feel smugly correct). Well, it actually worked. Got connected to an IRS representative in about 50 minutes when I'd previously been on hold for 3+ hours without getting through. The rep was able to clarify several questions I had about the step-up basis rules for inherited property and the proper way to document the valuation date we were using. The guidance I got was really specific to our situation with multiple brokerage accounts that had been jointly held with rights of survivorship versus accounts that were solely in my father's name. Turns out the handling is different between those types of accounts, which none of the online articles I read had mentioned. Just wanted to follow up and say I was wrong in my dismissal. Sometimes the simplest solutions actually work.

One thing nobody has mentioned yet - make sure you're getting accurate valuation for the securities on the date of death. Some brokerages just use the closing price on that day, but technically you should be using the average of the high and low prices on the date of death for publicly traded securities. This small detail can make a difference, especially for volatile stocks or if there was significant market movement on that particular day. You're entitled to the most accurate valuation possible. Also, if your father owned any non-publicly traded investments or closely-held business interests, you'll likely need a professional appraisal to establish the stepped-up basis. Don't let the brokerage oversimplify this process if complex assets are involved.

Don't forget about foreign stocks if your dad had any! My mother inherited some Canadian company stocks from my father, and there were special rules about foreign securities that almost caused us to miss out on significant tax advantages. The step-up basis applies, but there can be currency conversion considerations too. The broker should be handling this, but it's worth specifically asking how they're determining the stepped-up basis for any foreign investments. In our case, they initially only adjusted for the stock price change but missed the currency fluctuation component.

I'm sorry for your loss, Aisha. Going through this process while grieving is incredibly difficult, and I can relate to feeling overwhelmed by all the financial details. One thing I haven't seen mentioned yet is the importance of getting multiple copies of the death certificate from the funeral home or vital records office. Each brokerage will likely want an original or certified copy, and if your father had accounts at several firms, you'll need quite a few. I learned this the hard way when we had to wait weeks for additional copies while the estate settlement was delayed. Also, keep detailed records of everything - dates you contacted each brokerage, names of representatives you spoke with, and any reference numbers they give you. Some brokerages are much faster at processing these requests than others, and having good documentation helps if you need to follow up or if there are any discrepancies later. The step-up basis will definitely help reduce future tax burdens when your mom eventually sells any of these investments, so it's worth taking the time to get it done properly. Wishing you and your family the best as you navigate this difficult time.