Q. When property is sold, is it taxed on deceased or as an inheritance?
A. As an inheritance. That is, the cost basis steps up to the fair market value on the date of death.
Q. Selling direct from the estate, does the sale still follow an inheritance guidelines or would the sale be taxed on the deceased estate as an asset?
A. Both. That is, the estate would report the sale on the estate tax return (it does not go on the decedent's final individual tax return). But, it is still treated as an inherited asset (it gets the stepped up cost basis).
