The Basis is the Fair Market Value on the date of death.
Despite what some people claim, it isn't necessarily the same as the selling price merely because the sale is within six months of the date of death (unless the Estate is required to file a Form 706 to pay Estate tax and the Estate qualifies for and elects the Alternate valuation method).
A $1.1 million dollar house can easily have increased in value by $20,000+ in six months.
