The usual rule, for a gift, is that the recipient's basis is the giver's basis (what your parents paid for it). But there is an exception for the gift of his/her home, where she retained the right to live there ("life estate"). "If you give away an asset and keep a life estate in that asset..... the cost basis of the house is "stepped-up" to the value of the house on date of death [IRC 2036]")
More info: http://www.law.cornell.edu/cfr/text/26/20.2036-1
A life estate does not have to be explicitly established in the deed. Your mother probably had an "implied life estate." If so, that would give you the stepped up basis. There is case law on this. Check with a good lawyer.
http://accessiblelaw.org/Documents/LifeEstates-Inheritances.pdf
