Yes, the term would be short term (less than one year), because the gift is occurring at the same time as the sale.
The cost basis depends on the price paid for the item, or its fair market value (FMV) at the time of the gift, and whether you have a gain or a loss when you sell of the property.
Your basis for figuring gain is the same as the donor's adjusted basis (what they paid for it). Your basis for figuring loss is its FMV when you received the gift.
For example, you sold the piece for $100. Your relative paid $150 for the item. The FMV is $100 at the time of the sale. You report the sale price of $100 and the cost basis of $100, so no gain or loss.
Or, you sold the piece for $100. Your relative paid $50 for the item. The FMV is $100 at the time of the sale. You report the sale price of $100 and the cost basis of $50, so you have a gain of $50. Click here for more detail.
You can also add the cost of the sale to your basis.
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