Inheritance taxes depend on the type of inheritance. Cash is usually tax free since all taxes will generally have been paid on it by the deceased. Property is different. Like any property, you pay CG taxes on the difference between the purchase price and sale price. Since the deceased hasn't done this, the inheritor will have to pay CG tax on the the difference between the deceased purchase price and the appraised value at time of inheritance (transfer of ownership). Then if you sit on the property for a few years and it goes up in value you will again pay a CG tax on the difference between the value at time of inheritance and the sale price. But all this is no different than you buying a building in 1960 for $5000 and selling it today for a half million and paying CG tax on the profit.