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How to Calculate Cost Basis for Inherited Stock

Knowing how to calculate the cost basis on the inherited stock could save you thousands.

By Keith Noonan – Updated Nov 5, 2024 at 11:49AM

Key Points

  • Inherited stocks get a basis reset to market value at the owner's death, reducing capital gains tax on future sales.
  • Heirs cannot use losses prior to the original owner's death to offset other investment gains.
  • Understanding and applying the basis step-up rule can significantly cut heirs' tax liabilities.
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