No. At least not exactly. In general the cost basis of inherited property is the fair market value, on the date of death.  You do not need a formal appraisal. The real estate tax appraisal and/or Zillow (and similar sites) is close enough. It doesn't matter when the property is sold. But, yes, you need to determine the FMV on the date of death.

Alternatively, If the administrator of the estate votes to use an alternate valuation date for the estate, the cost basis is then equal to the fair market value of the property or assets either six months following the date of death or the date on which the asset was distributed to the person inheriting it, whichever is earlier.

" I've read in at least one place that if an inherited house is sold within a year of a decedent's death, the IRS will accept the sale price as the fair market value."

That's not true. Generally, when you inherit real estate your cost basis is the FMV of the property on the date the person you inherited it from, passed away. That is, assuming the administrator of the estate of the deceased did not make the conscious decision to use one of the alternate valuation methods at the time the property was deeded to you.  I really don't see that much use of the alternate methods used that much.

Generally, the absolute best thing the administrator of an estate that has real estate in it can do, is to get an appraisal on that property as soon as possible, if one was not done within at least a year before the passing of the original owner. The latest property tax bill can be used, but only as an absolute last resort. Typically, the property tax appraisal is for tax value, and not anywhere close to the true market value. Tax value appraisals will typically be 30% or more *below* the FMV of the property because the property tax appraiser is valuing on property size and square footage of any structures on that property. They never step foot inside any structure. So using the tax value appraisal would mean that more of any gain realized from the sale will be taxable income to the beneficiary recipient that sells the property.

Now sometimes, and it depends on the physical location of the property, if the property is sold rather quickly after inheritance (less than 3 months) then one will "usually" have no problem declaring the sale price as the FMV. Why do I say that?

Because, there is no clear cut definition of FMV for real estate. But I do have my own definition which I can't find anything to contradict it in any IRS publications I'm aware of. So my definition of Fair Market Value is:

What The MAXIMUM Amount is the Consumer Is Willing To Pay.