Step-up basis for inherited house with delay

[Red_Ed]

Need help determining the step-up cost basis of an inherited house. My mother died in January 2022, and her will stipulates that one of her children (who had been living with her in her house) can live in the house for one year, with house expenses paid by her estate during that period. After that one year, the house will be inherited by her children who will sell it and share the proceeds. I understand that each beneficiary will report the capital gain (if any) on their individual income tax returns in the year the house is sold. Should the cost basis be the fair market value as of the date of death, or as of one year later when the house is available to be sold? Also, is a Zillow Zestimate acceptable documentation of the fair market value (the house is in a well established neighborhood with plenty of comparable homes), or is an appraisal required? The gross estate value is under the estate tax threshold so there is no estate tax return. Thanks.

[Critter-3 · Accepted solution]

The cost basis IS the fair market value as of the date of death  and get a local realtor to give you  a valuation. 

[Mike9241]

how accurate is Zillow? 

https://www.zillow.com/z/zestimate/ 

[Critter-3]

NOT at all ... a local realtor should be able to give you an accurate market analysis based on your home's actual condition. 

[Red_Ed]

Thanks.