(a) General rule. The purpose of section 1014 is, in general, to provide a basis for property acquired from a decedent that is equal to the value placed upon such property for purposes of the federal estate tax. Accordingly, the general rule is that the basis of property acquired from a decedent is the fair market value of such property at the date of the decedent's death, or, if the decedent's executor so elects, at the alternate valuation date prescribed in section 2032, or in section 811(j) of the Internal Revenue Code (Code) of 1939. However, the basis of property acquired from certain decedents who died in 2010 is determined under section 1022, if the decedent's executor made an election under section 301(c) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Public Law 111-312 (124 Stat. 3296, 3300 (2010)). See section 1022. Property acquired from a decedent includes, principally, property acquired by bequest, devise, or inheritance, and, in the case of decedents dying after December 31, 1953, property required to be included in determining the value of the decedent's gross estate under any provision of the Code of 1954 or the Code of 1939. For certain property acquired from a decedent, the initial basis of the property must not exceed the property's final value for Federal estate tax purposes. See section 1014(f) and § 1.1014-10 for rules relating to the consistent basis requirement. The general rule governing basis of property acquired from a decedent, as well as other rules prescribed elsewhere in this section, shall have no application if the property is sold, exchanged, or otherwise disposed of before the decedent's death by the person who acquired the property from the decedent. For general rules on the applicable valuation date where the executor of a decedent's estate elects under section 2032, or under section 811(j) of the Code of 1939, to value the decedent's gross estate at the alternate valuation date prescribed in such sections, see § 1.1014-3(e).

(b) Scope and application. With certain limitations, the general rule described in paragraph (a) of this section is applicable to the classes of property described in paragraphs (a) and (b) of § 1.1014-2, including stock in a DISC or former DISC. In the case of stock in a DISC or former DISC, the provisions of this section and §§ 1.1014-2 through 1.1014-8 are applicable, except as provided in § 1.1014-9. Special basis rules with respect to the basis of certain other property acquired from a decedent are set forth in paragraph (c) of § 1.1014-2. These special rules concern certain stock or securities of a foreign personal holding company and the surviving spouse's one-half share of community property held with a decedent dying after October 21, 1942, and on or before December 31, 1947. In §§ 1.1014-1 to 1.1014-6, inclusive, and § 1.1014-10, whenever the words property acquired from a decedent are used, they also mean property passed from a decedent, and the phrase person who acquired it from the decedent includes the person to whom it passed from the decedent. The consistent basis rules in § 1.1014-10 apply to property subject to the consistent basis requirement, as described in § 1.1014-10(c)(1). For property subject to the consistent basis requirement, the rules in § 1.1014-10 modify the rules set forth in paragraphs (a) and (c) of this section and in §§ 1.1014-2 through 1.1014-9.

(c) Property to which section 1014 does not apply. Section 1014 has no application to property that constitutes a right to receive an item of income in respect of a decedent under section 691.

(d) Applicability date. This section applies after September 17, 2024. For rules on and before September 17, 2024, see § 1.1014-1 as contained in 26 CFR part 1 revised as of January 19, 2017.