When a deceased taxpayer leaves rental property to his son, is there capital gains tax in his final tax return on step up in property value, or recaptured depreciation?

[IsabellaG · Accepted solution]

No, the deceased person's tax return wouldn't include anything about the property bequeathed to his heirs. 

The prior depreciation taken when the taxpayer was alive is never recaptured, and if the beneficiary keeps using the property as a rental, he/she can begin depreciating the property using the stepped up basis.