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Good morning. The basis of property is increased to its fair market value at the date of the death. Thus, a later sale of the property at that fair market value would result in no gain and therefore trigger no tax. Once the property has been sold, the funds can be invested in any manner the seller chooses.
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Hi and welcome to Just Answer!
These two transactions - selling the house and contribution into IRA (or self-directed IRA) - are separate transactions.
For 2011 and 2012, the maximum you can contribute to all of your traditional and Roth IRAs is the smaller of:-- $5,000 ($6,000 if you’re age 50 or older), or -- your taxable compensation for the year.
Let me know if you need any help.