This would depend on whether the property is kept as investment property or converted to personal property (such as a house) by living in it for 2 of the last 5 years. Your basis in the property would be the fair market value as of the death. If it is investment property, the gain/loss would be determined by the length of time the property has been held. Over a year for long-term capital gain/loss treatment, less than a year for short-term gain/loss treatment. If it is a residence, you have can exclude as much as $250,000 for single to $500,000 MFJ