In most cases, your cost basis is the value on the date you inherited it, not the original purchase price. However, this may have to be adjusted if the apartment was rented or used for business after you inherited it.
Be aware that if you are audited, the IRS does not have to credit you with any basis that you can’t prove. So to avoid paying tax on the entire sales price, you should make a diligent effort to determine the fair market value on the day you inherited the property. There must be local appraisers or real estate professionals who can help with this.
