My sibling bought out my half of an inherited home 9 months after the death of our mother. No appraisal was done at the time of the death for the step-up basis. My sibling did have an appraisal done when they got the loan to pay me, and I had a date-of-death CMA done by a realtor. I planned to use the CMA averaged out with online estimates from Zillow, redfin, etc. to establish my step-up basis. The buyout price we agreed upon was lower than the appraisal sibling had done (20,000 less), but still within some of the lower online estimates for fmv. I thought taxes would be easy and we would do a gift of equity. But after reading tons of stuff, it is now my understanding that a gift of equity can only be done if the seller gets an official appraisal. If I file taxes without using the gift of equity, then the step-up basis I planned to use would essentially be the same as the buyout price. Seems like I need to just go ahead and get both an official date-of-death appraisal and an appraisal for the fmv when I was bought out so I can use the gift of equity. Or does the fact that I sold only 9 months after date of death mean I can use purchase price as FMV?
