Hal_Al
Level 15

Get your taxes done using TurboTax

Your math and methodology are correct.  But your assumption that your cost basis is the value in 2016 (date of the gift) is wrong.  Your cost basis is your mother's cost basis.  You capital gain is one twelfth of what your mother's capital gain would have been if she had kept title and sold it herself. 

 

There is no threshold for it not being taxed or tax exception for gifted property.