Stepped up Cost Basis

[crawfordn]

Hi Mark,
What's the best way to step up the cost basis after the death of a client. My inclination is to do a transfer out and transfer back in with the stepped up basis. Thanks, as always. Rick

[Mark]

Hi Rick,

Can you explain in more detail how you want the cost basis changed? What do you mean by "step up the cost basis"? Are you trying to change the cost basis to be the market value as of a certain date, and change the effective purchase date to today as well? Or, do you want the date to stay the same as the original purchase date?

[crawfordn]

Mark,
Upon the death of an individual, for the assets that are taxable in their estate, the cost are updated to date of death values and the acquisition date becomes their date of death, although any subsequent salesthat would have been long term retain their long term status. Basically, I need to update the acquisition date and cost to the date of death. Rick

[Mark]

Hi Rick,

Thanks for the clarification. Your suggested method of recording a Transfer Out and a Transfer In sounds best.

[crawfordn]

Thanks Mark,
Glad my instincts are still leading me in the right direction. Best, Rick