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I couldn't find this info from a search on IRS site, but if there is a Pub or instructions that covers it, I'd appreciate the reference.

I understand the "stepped up cost basis" on a stock that has appreciated in price, i.e.- person who inherits a stock gets a cost basis on the stock on the day of death, or perhaps the next trading day.

What is the cost basis determined from: Close on day of death; Open on day after death; Close on day after death; Median between High & Low on day of or day after death?

Further, what about the cost basis on a stock that has depreciated in price? Is the inherited person entitled to a loss if sold at a price lower than the decedent pay for it?

Having written this out, logically it would seem the stepped up basis would be whatever determines the cost basis (as asked above), i.e. a loss isn't allowed from the original purchase price.

If the stock price were to continue to decline then a loss is allowed only from the stepped up basis price.

But as I've seen written here before, logic & IRS rules aren't always in agreement!

TIA,
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