The house was designated in the will that upon the owner's death, it be sold and proceeds distributed to beneficiaries. Some beneficiaries lived in the house for a year. The house was then sold and beneficiaries moved. Since the house was NOT inherited; but sold at a profit, does the house get a stepped-up basis for the estate tax filing and capital gains taxes paid on the profit, or does it still get a stepped up basis. Also what are the tax ramifications for the beneficiaries under each scenario, inheriting the funds vs inheriting the house?
