When you inherit real property (residence, rental property, land) STOP immediately and get a qualified appraisal on the land.
When you inherit land, you receive the market value of the property as of the date of death. This value becomes your cost basis in the property.
When you go to dispose of the property, either by sale or by 1031 exchange, you will need this cost basis to calculate any gain/loss.
Don’t wait 18 years and then try to go back in time to figure out what that value was.
You cannot “assume 3.5% growth per year,” and you should not make an estimate.
And do NOT use what your ancestor paid for the property as the cost basis. This will probably overstate your gains, and the tax owed on any subsequent sale.
