It's somewhere in between the two. Please see this IRS website: https://www.irs.gov/publications/p551/ar02.html#en_US_201612_publink1000257012, and scroll down to the subheading "Qualified Joint Interest". This describes your Mother's situation. She is considered a co-owner with her husband when the property was purchased in 1975, so she shares half of that original basis, which would be 47,000. When her husband died, in 1989, she inherited the other half of the property at the Fair Market Value of 137,500 (half of the FMV of the entire condo in 1989). When you put the two together, her adjusted basis in the condo is 182,500. This is the correct figure to use as the basis unless other facts and circumstances dictate otherwise.
It's somewhere in between the two. Please see this IRS website: https://www.irs.gov/publications/p551/ar02.html#en_US_201612_publink1000257012, and scroll down to the subheading "Qualified Joint Interest". This describes your Mother's situation. She is considered a co-owner with her husband when the property was purchased in 1975, so she shares half of that original basis, which would be 47,000. When her husband died, in 1989, she inherited the other half of the property at the Fair Market Value of 137,500 (half of the FMV of the entire condo in 1989). When you put the two together, her adjusted basis in the condo is 182,500. This is the correct figure to use as the basis unless other facts and circumstances dictate otherwise.