Cost Basis on trust assets

What is the name of your state (only U.S. law)? NY

My parents each funded their own bypass trusts in early 2006. In late 2006, Dad passed away. Their house resides in the 'B' share of Dad's bypass trust, and some equities comprise his 'A' share, which, upon Mom's passing, get comingled with assets in her estate to comprise her total estate.

My question pertains to the cost basis of the equities in Dad's 'A' share:

1) do Dad's 'A' share equity assets get a stepped up basis to the date when he died just as the house comprising his 'B' share did?

or

2) if not, is the cost basis considered a carry over basis based on the date the equities went into trust, or

3) is the basis considered to be based on the date they were initially acquired back before they went into trust?

thanks much.

All the assets get stepped up on Dad's death.
The stuff in the "A" side gets stepped up again on Mom's death.

Thanks flyingron..

what i find interesting is that, for 2010, while its well advertised that the estate tax goes away, what seems not to be so well advertised is that the assets in the estate receive for that one year a carryover basis instead of the normal stepped up basis! So, it would seem that while one hand giveth, the other taketh away!