What Is the Date on Which a Property Is Considered Inherited for IRS Tax Purposes?


Quick Answer

Inherited property is considered acquired on the date of death of the decedent, according to the Internal Revenue Service. Even if an alternate valuation date is used, the property is recognized as belonging to the recipient on the date of death.

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Full Answer

Unlike gifting, where the recipient inherits the donor's basis, inherited assets receive a step up in basis equal to the fair market value on the date of death under Internal Revenue Code section 1041, according to the IRS. In addition, all inherited assets are seen as being held for a year or more, regardless of the decedent's actual holding period, thus qualifying inherited assets for long-term capital gain tax rates. Inherited assets are subject to tax upon disposition.

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