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The cost basis is based on how the property was acquired.
Specifically for inherited assets - the basis is equals to the fair market value (FMV) at the time the decedent passed away.
Thus - because you inherited the property from your spouse who passed away in 2007 - we need to know the fair market value at that time.If you invested additional money into the property after that - the basis should be adjusted by that amount.
If the decedent passed away in 2007 - we need to determine the fair market value at that time.
That is usually done by historical appraisal.
You may perform appraisal on your own - OR if you have difficulties - you may order any appraisal service.
The appraised value is usually based on comparable sales of similar properties in your area.
You may try your tax record - that might have a fair market value. You may contact the county where the property is located. The county usually perform appraisal to determine the fair market value for property tax purposes.
But anyway - if the property is not sold - the fair market value is determined by performing appraisal. There is no other ways.It is in your interest to determine the correct basis as that will reduce your taxable gain.
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