Basis of Inherited Property

Basis of property received from a decedent is its fair market value on the date of decedent's death or if Federal form 706 was filed, the value of the property on form 706. The 706 value is generally also fair market value on the date of the decedent's death but may be different if the estate elected Alternate valuation or Special use valuation.
If Alternate valuation is elected, the basis of property acquired from a decedent is its value six months after death or the date the property was disposed of. Alternate valuation cannot be used to increase basis when no estate tax is due.