Inherited property, actual transfer executed 5 yrs after death, what date to use for basis?

[magiklamp]

I am the beneficiary of an investment property. I was entitled to receive the property when the previous owner died five years ago. Since the time of death (so over the course of the five years) the decedent's estate has been filing taxes for the investment property and distributing income to the beneficiaries. For the first 4 years the estate paid the taxes on the income (i.e., did not pass the tax liability through to the beneficiaries). Last year the estate passed the tax liability through to the beneficiaries. This year the property was officially transferred to me. As far as the IRS is concerned, what year did I acquire the property? What date do I use for calculating my basis? (The property was appraised soon after decedent's death).

[mellish7777]

Use the fair market value as of the previous owner's date of death as your basis. Acquisition date is irrelevant since your holding period is long term but you can use the date of transfer.