Step up Basis

[seleam]

My mom was in the process of selling two rental properties that is held in a joint revocable trust.   She passed before it was settled.  My father had passed earlier.  So on her death, the trust became irrevocable.  Are the properties eligible for the step up cost basis for my father and mother's share?  If not, what basis should it be based on, property tax evaluation, FMV, appraisal fr my father's DOD or ?  Thank you in advance.

[Hi Palms]

In the process of selling....? Did she have contracts on both rental properties when she passed with only the closings left to be done? The problem you're going to have there is the stepped up basis wouldn't apply to the expectation of receiving money.

Here, you have executory contracts for fixed dollar amounts so there would be no stepped up basis for the amount of cash she would have received had she survived the closings. The real estate has been transformed from real property to anticipatory cash by virtue of the contracts.

Sorry for your loss.

[seleam]

Thank you for advice and kind words.  Yes, had contract in hand waiting for closing.  Just figuring on CG.  

[M-MTax]

Depending upon the terms of the trust, your mother likely received a stepped up basis, either in whole or in part, after your father passed.