26 U.S.C. § 1014: Basis of property acquired from a decedent

the fair market value of the property at the date of the decedent’s death, in the case of an election under section 2032, its value at the applicable valuation date prescribed by such section, in the case of an election under section 2032A, its value determined under such section, or to the extent of the applicability of the exclusion described in section 2031(c), the basis in the hands of the decedent. Property acquired by bequest, devise, or inheritance, or by the decedent’s estate from the decedent; Property transferred by the decedent during his lifetime in trust to pay the income for life to or on the order or direction of the decedent, with the right reserved to the decedent at all times before his death to revoke the trust; In the case of decedents dying after December 31, 1951 , property transferred by the decedent during his lifetime in trust to pay the income for life to or on the order or direction of the decedent with the right reserved to the decedent at all times before his death to make any change in the enjoyment thereof through the exercise of a power to alter, amend, or terminate the trust; Property passing without full and adequate consideration under a general power of appointment exercised by the decedent by will; In the case of decedents dying after August 26, 1937 , and before January 1, 2005 , property acquired by bequest, devise, or inheritance or by the decedent’s estate from the decedent, if the property consists of stock or securities of a foreign corporation, which with respect to its taxable year next preceding the date of the decedent’s death was, under the law applicable to such year, a foreign personal holding company. In such case, the basis shall be the fair market value of such property at the date of the decedent’s death or the basis in the hands of the decedent, whichever is lower; In the case of decedents dying after December 31, 1947 , property which represents the surviving spouse’s one-half share of community property held by the decedent and the surviving spouse under the community property laws of any State, or possession of the United States or any foreign country, if at least one-half of the whole of the community interest in such property was includible in determining the value of the decedent’s gross estate under chapter 11 of subtitle B (section 2001 and following, relating to estate tax) or section 811 of the Internal Revenue Code of 1939; , (8) Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(74)(B) , Dec. 19, 2014 , 128 Stat. 4049 ] annuities described in section 72; property to which paragraph (5) would apply if the property had been acquired by bequest; and property described in any other paragraph of this subsection. Property includible in the gross estate of the decedent under section 2044 (relating to certain property for which marital deduction was previously allowed). In any such case, the last 3 sentences of paragraph (9) shall apply as if such property were described in the first sentence of paragraph (9). This section shall not apply to property which constitutes a right to receive an item of income in respect of a decedent under section 691. If stock owned by a decedent in a DISC or former DISC (as defined in section 992(a)) acquires a new basis under subsection (a), such basis (determined before the application of this subsection) shall be reduced by the amount (if any) which would have been included in gross income under section 995(c) as a dividend if the decedent had lived and sold the stock at its fair market value on the estate tax valuation date. In computing the gain the decedent would have had if he had lived and sold the stock, his basis shall be determined without regard to the last sentence of section 996(e)(2) (relating to reductions of basis of DISC stock). For purposes of this subsection, the estate tax valuation date is the date of the decedent’s death or, in the case of an election under section 2032, the applicable valuation date prescribed by that section. appreciated property was acquired by the decedent by gift during the 1-year period ending on the date of the decedent’s death, and such property is acquired from the decedent by (or passes from the decedent to) the donor of such property (or the spouse of such donor), The term “appreciated property” means any property if the fair market value of such property on the day it was transferred to the decedent by gift exceeds its adjusted basis. In the case of any appreciated property described in subparagraph (A) of paragraph (1) sold by the estate of the decedent or by a trust of which the decedent was the grantor, rules similar to the rules of paragraph (1) shall apply to the extent the donor of such property (or the spouse of such donor) is entitled to the proceeds from such sale. in the case of property the final value of which has been determined for purposes of the tax imposed by chapter 11 on the estate of such decedent, such value, and in the case of property not described in subparagraph (A) and with respect to which a statement has been furnished under section 6035(a) identifying the value of such property, such value. Paragraph (1) shall only apply to any property whose inclusion in the decedent’s estate increased the liability for the tax imposed by chapter 11 (reduced by credits allowable against such tax) on such estate. the value of such property is shown on a return under section 6018 and such value is not contested by the Secretary before the expiration of the time for assessing a tax under chapter 11, in a case not described in subparagraph (A), the value is specified by the Secretary and such value is not timely contested by the executor of the estate, or the value is determined by a court or pursuant to a settlement agreement with the Secretary. The Secretary may by regulations provide exceptions to the application of this subsection.