Imported Broker 1099B not showing option of "inherited" for date acquired?

Forum|Forum|11 months ago
April 7, 2025
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Imported Broker 1099B for sale of inherited stock, deceased died on a Saturday in 2011 (long term covered). Broker 1099B shows date acquired as the day before, Friday, with cost basis as average of high and low prices on that Friday. The TurboTax entry screen for that imported 1099B, does not have the question "how did you acquire this asset" and there is no drop down to choose "inherited". The cost basis is incorrect, should be the average of four (4) prices, high and low on Friday before death, high and low on Monday after death. I can change the cost basis with an adjustment, but should I do about the date acquired being wrong? I think it should be labelled as "inherited" but the entry screen does not have that option at all. Complicating this is the fact that the Broker 1099B has a date shown, not "inherited", if I put inherited I will not be following the rule to match the 1099B EXACTLY. Please advise.

SusanY1

You can safely use the date shown on your 1099-B. "Inherited" is used for the "acquired" date field, primarily when the sale would otherwise be short-term. "Inherited" in this field tells the program and the IRS that the holding period is long-term when the calculation by date alone wouldn't give a long-term "answer".

After the first year, many brokerage firms replace "inherited" with the date being used to determine the basis.

Since the securities are shown as covered then you shouldn't adjust the number in the basis box. Instead, leave the imported data in the basis box so it matches the IRS database and then enter the correct basis after checking the box "the cost basis is incorrect or missing on my 1099-B".

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rahosmerAuthor

Thanks for your fast response, SusanY1!

Yes, I did make the adjustment to cost basis by checking "basis is incorrect or missing" and then put in the correctly calculated basis as average of four high low prices on both Friday before death Saturday and Monday after Saturday of death.

If I leave the acquisition date in TurboTax and on my return as the one shown on 1099B as the Friday before the death on Saturday, of course it will match up with the Broker 1099B and with the IRS database since as a covered security it is being reported to IRS, so it won't be flagged as not matching. I do understand that one day won't make any difference in this case as to long term or short term, I just thought that there was a rule that "inherited" was required if indeed it was an inherited stock. Am I wrong about that?

SusanY1

Inherited is only required to be used when it would change the nature of the gain or loss from short term to long term (such as when the asset is sold in the same year that it is inherited.)

Since you have held your investments beyond this time frame, you do not need to note that they were inherited on this screen.

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