Cost Basis on Quit Claim with Life Estate

[sppav0]

What is the name of your state? Wisconsin

My mother and step-father Quit Claimed their residence to me and my brother in 1995 reserving a life estate.
Both are deceased most recently my mother in Sept '04. We sold the house in March of '05 (house was vacant between that time) and are uncertain of the cost basis for determining capital gain. Is it when they filed the Quit Claim or upon her death?

 

[abezon]

Your cost basis is whatever they paid for the house before giving it to you, plus any improvements made since purchase. Since they gave you the house, you do not get a step up in basis.