pk
Level 15
Level 15

Deductions & credits

@bryan62 , while agreeing with my colleague @Vanessa A , i have a slight  different nuance to the situation.

(a) I see this as a gift, with  a delayed/ restricted possession.  Thus it is effected  "only when permitted"  by the condition of her death.

(b) So the acquisition is by gift and no inheritance.

(c) However, since at the time the gift being  effective, the donor's basis  was stepped up to FMV  ( under US laws applicable  to you ),  your basis is FMV on the date of death i.e. when the "possession/gift" was effective.

 

Note that the my conclusion leads to operationally the same as that of my colleague except that I recognize that  this was a gift.

 

Does this make sense ?

 

Is there more I can do for you ?

 

pk