What is the Cost Basis For Inherited Stock?
Even if the stock has increased or lost value over time, the cost basis for inherited stock is usually based on its value on the date of the original owner’s death. You cannot claim a loss for losses incurred while the original owner was alive.
Among a few exceptions, if an executor of a large estate has to file an estate-tax return, the executor can choose to set the basis at the value six months after the owner died rather than at the date of death.
See Kimberly Lankford, Cost Basis For Inherited Stock, Kiplinger’s Personal Finance, April 2013.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.