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K-1 should be marked final, and you would mark that box on the K-1 input on the individual return. Input the disposition and resulting gain or loss on Schedule D like you would any other capital investment sold or disposed of.

IRS Reg. 20.2031-2(b): If there is a market for stocks or bonds, on a stock exchange, in an over-the-counter market, or otherwise, the mean between the highest and lowest quoted selling prices on the valuation date is the fair market value per share or bond. If there were no sales on the valuation date but there were sales on dates within a reasonable period both before and after the valuation date, the fair market value is determined by taking a weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the valuation date.

The price changes in the three funds in question moved by pennies each over the two days. I think the biggest price swing was twelve cents per share.

And if they don't, I wouldn't charge a client $100 to mess around with it a long time only to save him $10 in taxes. I would take the most conservative price or even the middle of the road price [to arrive at FMV] and move on unless there is some wild fluctuation going on there.

Trade date. If they entered a limit over to buy at a lower than the current market price - it could be sitting out there for 6 months before being triggered. Sara, where do you get your instructions to weight the basis between days when they die on a weekend? Instead of doing all that, notify the brokerage firm of the date of death and the cost basis of the account should be adjusted automatically.

The decedent did not actually or constructively receive the cash from the sale until after death, therefore it definitely goes on the 1041. (Just like if he requested his RMD before death but the check didn't arrive until after.) The real question is whether it is IRD or income to the estate. This makes a difference because basis will be different. Pubs aren't "authority," but Pub 550 mirrors the code: " Securities traded on an established market. For securities traded on an established securities market, your holding period begins the day after the trade date you bought the securities, and ends on the trade date you sold them." In your case, the trade date occurred after death, so I would say the estate sold them and gets stepped-up basis. (The estate comes into existence at the moment of death, so there is no way the decedent could have sold the stock.) Now the fun part of determining basis. Since the person died on a Saturday, which is not a trading day, you get to do some fancy math. First find the high and low prices of the stock on Friday and average them. Do the same for Monday's prices. There are three days between Friday and Monday, so you have to weight the averages: (Friday's mean X 1) + (Monday's mean X 2)/3. There is your basis. Note that the broker will give the decedent a 1099, so you'll have to report the sale on the final 1040 and back it out. Have fun, and do charge A LOT.