Stepped-up basis for stock owned
It is not the club's responsibility to track any step-up in basis for stock owned by a deceased member. The stock owned by the club is the property of the club which is a separate legal entity from the individual members. You would not step-up the basis of any stock owned by the club at the death of a member. It is a common misconception that members of an investment club own a portion of each stock in the club's portfolio. This is not the case. Each member owns a portion of the club. The club owns the stock in its portfolio.
At the death of a member you might transfer stock from the club to the estate of the deceased member as part of the withdrawal. The withdrawal report would indicate the fair market value and the basis of the stock transferred to the deceased member's estate. It is the estate's responsibility to record the step-up in basis for the heirs.
In the club's books there is no way to record a step-up in basis for some of the stock in its portfolio at the death of a member. It would be contrary to the tax code do such a step up in basis for the club's stocks for this reason.
The heir(s) of the deceased member could become members of the club, if the club allowed this. They would get a step-up in basis for the deceased member's interest in the club. In this case the deceased member's interest in the club can be considered like a security and heirs get a step-up in basis. This can be accomplished by withdrawing the deceased member for all cash and then immediately deposited the exact same amount back into the club in the name of the heir or heirs. This would give the heirs a cost basis in the club equal to the fair market value of the deceased member's interest in the club, that is a step-up in basis to fair market value.