Updating cost basis

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Nov 9, 2009 11:37 am

I clear thru Pershing. I was just told by my back office that Pershing cannot change the cost basis in there system. Client and spouse hold joint securities. Spouse dies, client new cost basis in now that value of the securities on the date of death. My back office says that Pershing cannot change the cost basis on the statements, to reflect the new cost basis. My question is can you update the cost basis, so that they show on your statements?


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Nov 9, 2009 12:22 pm
JackBlack:

I clear thru Pershing. I was just told by my back office that Pershing cannot change the cost basis in there system. Client and spouse hold joint securities. Spouse dies, client new cost basis in now that value of the securities on the date of death. My back office says that Pershing cannot change the cost basis on the statements, to reflect the new cost basis. My question is can you update the cost basis, so that they show on your statements?


<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

 
Are you sure about that?
Nov 9, 2009 12:34 pm

Am I sure that they get a step up in basis?  Yes.


 In community property states owners of community property (i.e., all property a married couple acquires during the marriage other than by gifts or inheritances) get a full step-up in basis when the first partner dies.
 
http://www.investopedia.com/terms/s/stepupinbasis.asp
http://www.wwlaw.com/stepup.htm
http://www.paytaxeslater.com/stepup.htm
 
Nov 9, 2009 12:41 pm

Ahh...community property laws. 

Nov 9, 2009 12:45 pm

Yes, Community Property has its uses.


FYI:


If you open a Trust account in <?: prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Alaska, with an Alaska trust company and the assets are held in Alaska you can get the same tax treatment.


<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

Nov 9, 2009 1:12 pm
JackBlack:

Yes, Community Property has its uses.


FYI:


If you open a Trust account in <?: prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Alaska, with an Alaska trust company and the assets are held in Alaska you can get the same tax treatment.


<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

 
That's, but I don't think I will ever use that information.
Nov 10, 2009 9:55 am
JackBlack:

I clear thru Pershing. I was just told by my back office that Pershing cannot change the cost basis in there system. Client and spouse hold joint securities. Spouse dies, client new cost basis in now that value of the securities on the date of death. My back office says that Pershing cannot change the cost basis on the statements, to reflect the new cost basis. My question is can you update the cost basis, so that they show on your statements?


<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

 
You can at Jones.  You just go into the Portfolio Cost Basis system and change it.
Nov 10, 2009 11:24 am

Thanks B24.



I have a hard time believing that Pershing cannot update cost basis, can anyone confirm this?


Nov 10, 2009 4:36 pm
iceco1d:
Wet_Blanket:
JackBlack:

Yes, Community Property has its uses.


FYI:


If you open a Trust account in Alaska, with an Alaska trust company and the assets are held in Alaska you can get the same tax treatment.


 
Thanks, but I don't think I will ever use that information.



Sure you can.  The next time an FA at your firm tries that, you can leave them the f*ck alone, and AVOID preventing that business! 

 
That's a good one.  Today has been a great day.  In the morning, I successfully prevented a $850,000 relationship.  For lunch, I ate at my desk while listening to recordings of our reps - followed by a brisk firing.  Then I wrapped up my afternoon sending sh*t to people to quickly respond to.
Nov 10, 2009 10:47 pm

It's because of my ingenuity.  How many compliance guys would sit in a bathroom stall for 4 hours gathering "intel?"

Nov 10, 2009 10:48 pm

The RIAs and Hybrid Advisors supported @ TradePMR have the ability to modify cost-basis information via our clearing firm, Sterne, Agee & Leach, Inc. -- an easy task to accomplish. 

 
I would re-confirm with Pershing that they can't update cost-basis information -- seems strange to me that the largest clearing firm in the U.S.A., can't provide for this simple task.
 
During my experience with other Pershing firms, I was always amazed that to maintain cost-basis the client (or Advisor) had to pay to maintain it -- something like $2/account!  I believe all of the B/D's today, regardless of clearing firm include cost-basis for all accounts (including IRAs) free of charge and also print the information on the clients statement free of charge also.
 
 
Nov 11, 2009 10:40 am

I was told that any position that has a cost basis in the system ie bought at Pershing, or the other firm transfered over the cost basis can not be updated.  They can update cost basis for any position that was not purchased on there books. I am look to update cost basis to the value on the date of death of client spouse and am being told that is not possable. They can had have updated the position that were purchased when I did not clear thru Pershing.

Nov 11, 2009 11:02 am

Jack, that makes a little more sense.  For example, if I bought a client 100 sh IBM at 100 in their account here, I cannot go in and change that cost basis.  However, if those shares had been ACAT'd over from another firm w/out cost basis, I could enter it.

 
Although if you have an estate situation, the back office should be able to update cost basis to reflect the new stepped-up cost.  I checked our Intranet, and I know our backoffice can do this in CommProp states.  That may be the reason for it - your system may not allow it.  But that seems strange for a large firm like Pershing.  Are you asking the right questions of the backoffice?  Keep pushing, I bet you can get it done.
Nov 11, 2009 2:24 pm

Yes I was very clear. They said no.