Due to the stepped-up basis rule, the basis for inherited property usually is its value on the date of sale (special rules apply for property from estates using the alternate valuation date and for those inheriting from a decedent who died in 2010). What’s more, there is an automatic long-term holding period, regardless of how long you—or your parent—held the property.
The amount of gain reportable and subject to tax. On certain tax-free exchanges of property, gain is not recognized in the year it is realized.