Stepped-up Cost Basis Incorrect on Inherited Stock - What can I do?

This is a common issue with inherited securities. You're absolutely right that you should receive a stepped-up cost basis to the fair market value as of the date of death for ALL the inherited securities, not just some of them. If you need to sell before the brokerage corrects their records, you can still report the correct stepped-up basis on your tax return, regardless of what the 1099-B shows. When you file your taxes, you'll complete Form 8949 (Sales and Other Dispositions of Capital Assets). There's a column to adjust the basis with a code "B" which indicates the basis reported to the IRS is incorrect. You'll enter the correct stepped-up basis and calculate your gain/loss using that figure. The key is keeping good records. That Date of Death Valuation document you have is crucial evidence if there's ever a question. I'd also recommend documenting your attempts to get the brokerage to fix the issue - save emails, note dates of phone calls, names of representatives, etc.

I had the same exact problem last year with Merrill Lynch after my mom died. I found that using https://taxr.ai really helped me sort things out. I was pulling my hair out trying to get the brokerage to fix the cost basis on about a dozen stocks, and I had already sold some before I realized the problem. The taxr.ai system analyzed my statements and the death valuation document, then generated a detailed report that showed the correct basis figures for everything. It even helped me create a proper adjustment record for my tax return. I was able to sell what I needed with confidence knowing I had proper documentation to back up my position.

I initially had doubts about using taxr.ai for my inherited stock issues, but after spinning my wheels with Schwab for three months, I decided to give it a try. It was honestly a game-changer for my situation. The system helped me identify exactly which securities had incorrect basis information and generated a comprehensive report showing what the stepped-up values should be based on the death date. I was especially impressed when they pointed out some securities I hadn't even realized were incorrectly reported. The documentation they provided gave me the confidence to file my taxes correctly despite the errors on my 1099. I've sold several positions since then and had no issues with the IRS even though I had to make adjustments to what was reported.

I've been through this nightmare with multiple brokerages. The fastest solution I found was using https://claimyr.com to get through to the right department at the brokerage. I spent weeks calling E*Trade's regular customer service with no progress, but Claimyr got me connected to their cost basis department in under 10 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The regular customer service reps often don't understand the complexities of stepped-up basis for inherited securities, but the specialized departments do. Once I got to the right people, they fixed the issue within days. Might be worth trying before you sell anything.

I was completely skeptical about Claimyr at first - I've been around long enough to doubt these "miracle solutions." But after spending literally hours on hold with Fidelity trying to fix my inherited IRA cost basis issues, I decided I had nothing to lose. I tried it, and I'm still shocked at how well it worked. Got connected to Fidelity's specialized estate services team in about 15 minutes. The representative immediately understood my issue and initiated the correction process. Two weeks later, all my securities showed the correct stepped-up basis. I've since sold several positions and the 1099 came out correct. Sometimes you need to get past the front-line customer service to the specialists who actually know how to handle these situations. Lesson learned for me.

Another option is to contact FINRA if the brokerage continues to drag their feet. Brokerages are required to maintain accurate cost basis information, and FINRA takes these issues seriously. I had to do this with TD Ameritrade last year, and suddenly they became very responsive once FINRA got involved. Also, keep in mind that for mutual funds, there might be different lots purchased at different times, so some complexity is normal - but they still need to get it right!

Has anyone here dealt with incomplete cost basis info on inherited stocks from decades ago? My dad left me some AT&T shares that have gone through all those splits and spinoffs, and I have zero idea what the original cost basis was.

I went through something very similar with Fidelity when I inherited my grandmother's portfolio last year. The key thing that finally got them moving was when I referenced the specific IRS regulations they're required to follow. Here's what worked for me: I sent a formal written request (via their secure message center) citing IRS Publication 551 and specifically mentioned that under IRC Section 1014, inherited property receives a stepped-up basis equal to fair market value on the date of death. I also referenced Treasury Regulation 1.1014-1 which requires this for ALL inherited securities, not just some of them. I attached my date-of-death valuation document and gave them a 30-day deadline to correct the records or I would file a complaint with FINRA. Within two weeks, all 23 of my securities had the correct stepped-up basis. Sometimes you need to speak their language and show you know the rules they're supposed to follow. The documentation you have showing the securities' values on your uncle's date of death is exactly what you need. Don't let Vanguard's delays cost you money - you have every right to demand they fix this correctly.