BASIS ADJUSTMENT ON DEATH OF ROTH IRA OWNER? CAN HEIR DEDUCT LOSS?

[Guest TIM KURL]

MY SPOUSE DIED LAST YEAR, WITH A SUBSTANTIAL LOSS IN HER 1998 ROTH IRA CONVERSION (ABOUT 50K). I AM THE BENEFICIARY OF THE ROTH, AND I NEED TO KNOW WHAT THE BASIS OF MY SPOUSE'S ROTH IRA IS. SINCE IT IS NOT A CAPITAL ASSET, IS THE BASIS ADJUSTED UNDR IRC. 1014 AT HER DEATH? CAN I KEEP IT SEPARATE FROM MY ROTH IRA'S AND DISTRIBUTE MY SPOUSE'S (LOSING POSITION INSIDE) IRA'S, OR DID THE OPPORTUNITY EVAPORATE LAST YEAR, BEFORE/AFTER HER DEATH? I ALSO HAVE A SUBSTANTIAL LOSS IN MY ROTH IRA'S, SO IT MAY BE DESIREABLE TO KEEP THE SPOUSAL IRA'S INTACT, AND CLOSE ALL OF MINE SEPARATELY. CAN I DO THIS?

ANY SUGGESTIONS?

P.S. DON'T TALK TO ME ABOUT DIVERSIFICATION, I LEARNED MY LESSON.