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Old 08-04-2017, 03:08 PM
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Allocation of basis "step up" upon death of joint owner

Husband dies, wife inures to brokerage acct owned JWROS. 1014 gives us a step up in basis for husband?s ?half?. This is not a community prop. state.

My understanding is that assuming (1) basis of 100% of account before husband?s death was $10,000, (2) fmv at of 100% of account at husband?s death was $90,000, then wife?s basis in account = (10,000 + 90,000)/2 = $50,000 and that such $50,000 is allocated among the account?s holdings.

Surviving spouse's brokerage firm and accounting firm say no, husband?s ?half? can be segregated and receive a full step up of $45,000 while wife?s half can be segregated and will have a basis = $5,000. This would of course allow "husband's half" to be liquidated with no or minimal cap gain.

To me this is incorrect and flies in the face of facts surrounding the ownership of an undivided interest in property. However, i can't find authority for my position.

Help! Fine if i am wrong but I need to be certain . . .



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