If property is GIFTED, the receiver of the gift never pays a tax. The giver of the gift has to deal with gift taxes.
If property with a basis (original cost plus improvements) is $200k and the property sells for $500k, there is a $300k profit and is taxable.
If instead the property is INHERITED, the receiver of the property takes it into their inventory of stuff at the Date of Death Value.
If the property was sold immediately after death is it a good bet the property was worth whatever it sold for…..
That would not cause any taxes to be paid. In fact probably would be a loss because of closing costs.
Now let’s say the inheritance was 5 years ago when the property was worth $350k (that is the Date of Death Value).
Now it sells for $500k. There is a $150k taxable long term capital gain.
The above is true for anyone living in the United States. Notice I did not say citizen… it is anyone living in USA.
In the inheritance example we would have a foreign tax credit for whatever tax was paid to the foreign government.