Inherited property tax basis question.

[cnewst09]

Hello and thanks in advance for any help.

My wife inherited a property in 2019 from a deceased relative. She was the executor of the deceased's estate. After the estate and all the issues were settled, the home was appraised and sold. It was appraised approximately 5 months after the date of death. It sold a month after that.

Now when filing taxes, it appears the tax basis is on the amount the home was worth at the time of death. But it wasn't appraised until 5 months after death. So I'm wondering how do I figure out the tax basis amount?

I've read that if sold within 6 months or so, the tax basis can be the sale price, but I'm not sure if that's right. The IRS website is less than clear about these issues, so I was hoping someone could help me out.

Thank you for your time.

[Anonymous_ · Accepted solution]

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@cnewst09 wrote:

But it wasn't appraised until 5 months after death. So I'm wondering how do I figure out the tax basis amount?........I've read that if sold within 6 months or so, the tax basis can be the sale price.......

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Provided the property was sold within a reasonable time after the death of the decedent (which appears to be the case), the (stepped up) basis will generally be virtually the same as the sales price. 

Regardless, with respect to the appraisal, merely because it was appraised five months after death does not necessarily mean the appraised value was not based on the date of death. Appraisers are generally aware that the property should be appraised as of the date of death in instances such as the one presented here.

[cnewst09]

Thank you for your helpful answer!