dixie7175, my assumptions would be that when the father died, therewas a step-up and then when the mother passed away there was another step-up -- thus the heirs should have very small gain to contend with ( if any). The gain that will affect the inheritos is that between the time the mother died and the sale of the prop -- if there was any ( there should have been a valuation done on the death of the decedent or soon thereafter as determined by the trustee or executor ). So no I don't expect any capital gains. What I don't know -- because of the way the property was held is unknown -- is if there is any taxes to be paid by the estate of your mother-in-law because of increase in value of the share of your father-in-law -- after his death.
