Receiving a gift is not a taxable event to the one who receives the gift. If the gift is large enough, it could result in gift tax being due by the donor.
In any case, you are not to report any gifts you receive on your income tax return. This is true whether the gift is in cash or a gift of property.
When you sell property you received as a gift, you have a whole new story. Your basis (cost) in the property is the same as it was in the hands of the donor. You are considered to have owned the property for as long as the donor owned it, and you also take the donor's cost. This is true for gifts made while the donor is alive. Property received from an estate is treated differently.
So how does this work on your tax return?
Let's assume that you received a piece of real estate from your mother three months ago, and the real estate has a current value of $100,000. We will further assume that your mother owned the property for twenty years and had paid $30,000 for it.
If you sell the property this year for $100,000, you will have a long-term capital gain of $70,000 ($100,000 minus your mother's cost of $30,000). You get the favorable long-term capital gain treatment because you are deemed to have owned the property for twenty years.
Other things to consider
Gifts are not taxable to the person receiving the gift, but they are also not deductible by the person giving the gift. Only gifts to charities and other organizations approved by the IRS provide a tax deduction for the giver. In addition, annual gift giving to any one individual is limited. The dollar limit is $14,000 in 2016 and 2017 ($28,000 for joint filers.) Any gifts in excess of this amount requires a tax filing and potential gift tax.
If you have questions about the tax consequences of giving or receiving gifts please call.