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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.

My wife died on 15 January 2019. 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?

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?
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