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Sorry for your losses.

Sometime before 2000, my mother-in-law moved her security holdings into two brokerage accounts. One account was in her name with her son as joint tenant. The other was in her name with her daughter (my wife) as joint tenant. I'm only concerned with the cost basis of securities held in the latter account.

My mother-in-law died on 08 October 2018 without a will. It is my understanding that the cost basis of the securities held in joint tenancy with her daughter (my wife) would be stepped up to the market value of the securities on 08 October 2018.

That's not exactly correct. Since your wife was given partial ownership (presumably 50%) sometime before 2000, the basis of her portion would remain the original basis that was gifted. Only MIL's portion (presumably, the other 50%) would get a step up upon MIL's death. That said, it's a moot point, because...

My wife died on 15 January 2019.

Since your wife has died, assuming that she was the sole owner of the account at the time of her death, the entire account will receive a step-up in basis.

The Probate Court in Nebraska didn't distribute the account held in her mother's and her name until 14 June 2019. It was transferred to my wife's estate that I administer.

What date is used to determine the stepped up cost basis of the securities?

(1) Is it the market value of the securities on 15 January 2019, the date of her death?
(2) Is it the market value of the securities on 14 June 2019 when the securities were distributed to her estate?

Typically, the date of owner's death is used for the step up in basis, which would say it's the value as of 1/15/19. However, the executor of the estate can choose an alternate valuation date 6 months after the date of death (in this case 7/15/19) by using IRS Form 706. Be aware that the alternate valuation date must be applied to the entire estate, not just to this one account.

I had no knowledge of the securities that she inherited until they were distributed to my wife's estate account on 14 June 2019. I have no knowledge of any dividends received prior to distribution of the account to my wife's estate. I assume that I will be responsible for paying the estate's income taxes on dividends received after the distribution date. Is this correct?

Your wife's estate should get a K-1 from your MIL's estate that will indicate any tax liability due to dividends receive prior to the date of distribution. As the executor of your wife's estate, you can choose to have the estate pay dividends on any distributions received by the estate, or you can choose to distribute any dividends received to the heirs, and pass the tax liability for those dividends to the heirs.

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