TO clarify, an inheritance, be it from the estate of the deceased or directly from the deceased, is not taxable or reportable on any tax return, provided it's value does not exceed $5.2M. For the beneficiary recipient, the cost basis of inherited assets is the FMV of the asset at the time of the passing of the deceased, and not the date it was inherited and put the name of the beneficiary recipient. The only thing the recipient will pay taxes on, are any gains that have accumulated since the passing of the deceased.
Do note that the above does not apply to inherited retirement accounts. Inherited 401(k)'s and IRA's are treated entirely different for tax purposes. How they are treated tax-wise depends on to many factors to cover here.
