BobKamman
Level 14
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Short answer:  No.

Long answer:  Why do you assume they get Daddy's basis and holding period?  That's likely, but we don't know if FMV at time of gift was less.  Then there's the problem with tax rate on recaptured depreciation.  And did they actually get to keep the proceeds?  They weren't reinvested in a place that also has Daddy's name on the deed?  IRS would look at substance over form.