@namaci I think she would use the purchase price as her basis, but when she sells the stock she can offset the gain by any unrecognized losses that her father was not able to deduct (due to it being a related party transaction).
Example:
TP sold stock to S, his brother, for $1,000. TP had an adjusted basis in the stock of $2,500, but cannot deduct the realized loss of $1,500 because S is a related party. S takes a basis in the stock of $1,000. If S eventually sells the stock to an unrelated third party for $1,800, S can offset the $800 gain with $800 of the deferred loss. The remainder of the deferred loss ($700) is not recognized.
FAR 75 (8/21/13)
AUD 72 (10/29/13) 74 (2/12/14) 84! (04/01/14)
BEC 75 (11/27/13)
REG 72 (05/29/14) 74 (07/10/14) 86 and DONE! (10/02/14)
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