Calculating the Cost Basis of Inherited Stock

When the original owner dies on a weekend, the math gets a little trickier.

Kimberly Lankford's avatar
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I inherited stock from my dad, who passed away on a Saturday in 2010. I sold the shares in 2014, and I am trying to figure out the cost basis for my taxes. When stepping up the cost basis, do I use the price from the Friday before he died or the Monday afterward?

Ordinarily, you take the average of the highest and lowest quoted selling prices on the date the original owner died to come up with the cost basis for inherited stock. But if the owner died on a weekend, you do that calculation for Friday and Monday and average those two numbers, says Jerry Love, a certified public accountant in Abilene, Texas.

To track down the high and low figure for an old date, Love uses BigCharts.com. Click on “historical quotes” and enter the stock symbol and date to get the high, low and closing price and a chart of the stock’s performance on that date.

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For more information about taxes for inherited stock, see Cost Basis for Inherited Stock. Also see 5 Things You Must Know About Taxes on Your Investments.

Kimberly Lankford
Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.