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When I take shares from my Ameritrade IRA (as part of Minimum Required Distribution) and put them into my Ameritrade Margin account, they lose the cost basis as well, setting it to zero. This is worse because I need the cost basis on the day of the transfer for future tax purposes, and the confirmation slip does not include the value at the time of the transfer. And looking up the prices on the day of the transfer do not help because I never know the exact minute the transfer happened.
As you say, in that setting your cost basis in the shares transferred from the IRA is the fair market value on the date of transfer. And I've never had it come up on this point, but I'm sure you don't need to know the exact minute of the transfer. For gift and estate taxes, and for charitable contributions, the "fair market value on the date of transfer" is the average of the high and low prices for that date.

Resetting it to zero is silly, but the cost basis within the IRA account is not relevant anymore, either.

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