Full Service Brokers and DOD Stock Basis

[Ringers]

I am doing a return for a widow whose husband died in 2013 and their full service broker sold about $150000 of jointly held stock in 2014.  I have an e-mail out to him now, but I wonder from all of your collective experience do you find that full-service brokers who charge account management fees of $3000-$6000 will automatically provide a stepped-up basis for the widow's stocks by calculating the DOD value of 50% of the stock (100% in community property states) and then adjusting the cost appropriately.  They should also treat the sales of 1/2 of the stock, even if held less than a year, as long term.  In your experience, do they do this as an automatic service when they are aware of the spouse's death, or do they just keep the cost basis as of date of purchase?

[Jack from Ohio]

I am doing a return for a widow whose husband died in 2013 and their full service broker sold about $150000 of jointly held stock in 2014.  I have an e-mail out to him now, but I wonder from all of your collective experience do you find that full-service brokers who charge account management fees of $3000-$6000 will automatically provide a stepped-up basis for the widow's stocks by calculating the DOD value of 50% of the stock (100% in community property states) and then adjusting the cost appropriately.  They should also treat the sales of 1/2 of the stock, even if held less than a year, as long term.  In your experience, do they do this as an automatic service when they are aware of the spouse's death, or do they just keep the cost basis as of date of purchase?

You do not want to hear my experiences and opinions of "full-service" brokers and what they do for ("to") widows.  Let me just say that their commissions for that month or year look VERY GOOD!

[Abby Normal]

I had one recently where the broker entered the wrong (much lower) basis for inherited stock and one of the beneficiaries noticed it 3 years later. Had to do amended returns.

 

Brokerage accounts should never be joint, unless you live in a community property state. It makes the basis step up/long-term/short-term problems much easier.