Isn't there something in the IRS rules about estate property that it's "cost basis" value is reset to the value at time of death? If that is true, then the heirs would have the 2 Mil cost basis and not pay any taxes since it was sold for 2 Mil.
Yes, step up basis. But the heirs would've needed to be smart enough to get it appraised at the time of death and they would've needed to hire an appraiser who actually knew what they were doing. I doubt very many appraisers would've given them a $2M figure. If they got a low ball appraisal and then it sold for big bucks the IRS might want a cut.
