Sale of Inherited Property to Related Party

[Ataguding]

     Taxpayer inherited a home and promptly sold the property to their sibling.  Since the property was sold to a related party, any gain on the sale should be treated as ordinary income if the property can be depreciated by the party receiving it.  How does one determine whether or not the property can be depreciated?   Prior to death, the home was used for personal use and not rented out.  

[IRonMaN]

You do realize that you get a step up in basis upon death?

[Ataguding]

Yes  - with the basis determined to be the FMV as of the date of death, there will be little to no gain, but I just want to ensure that if there is a gain it is treated appropriately.  Thanks!  

[sjrcpa]

Have the taxpayer ask the sibling how they will be using with the property.

[BobKamman]

Knock on the door and ask if anyone is renting it or conducting a business there?  For Section 1239 purposes, the use of the property counts.