Form 1041, Sch D

You are correct. You have a $10,000 long term loss. Yes the $30,000 is lost and gone forever.

ed

A gain of 10k. Strange, a lot of web sites tax about step-up of basis, but few talk about a step-down. What's more: any wash sale carryovers are also lost.

Death of the taxpayer

If the taxpayer dies and capital loss carry overs are not used up the taxpayer's estate may not deduct the remaining capital loss. An unused individual capital loss may not be carried over by a surviving spouse.

Were did a 10k loss come from? It's either 10k gain or 30k loss. Am I missing something?

When Mom died, her cost was not the issue. Step up in basis takes care of that. So, she passed and the stock was worth $70K. Ok, but is there not an alternate valuation of 6 months later? Since it was sold 9 months later, this may or may not help, but odds are, the later valuation would be higher, and the cap gain less than the $10K we are discussing. JOE

If that's true, you might be able to justify the actual sale price as the value on the alternate valuation date. The problem is that you have to elect the AVD on the 706, and the values on that date will apply to all assets of the estate.

Stu

"Were did a 10k loss come from? It's either 10k gain or 30k loss. Am I missing something? "

No, sorry. it obviiously should be a gain, not a loss, of $10K.

ed