Artwork, antiques, or other such goods: the category I am trying to refer to is those things which are sold on a market which is not liquid enough for it to be immediately obvious what the market price is, and where the items in question are 'unique' in nature like artwork, antiques, etc. Maybe there is a good category set forth to describe this already.
I understand that if person A inherits items, A has a cost basis on these items that is 'reset' to the moment of death.
Suppose A inherits a large number of these items, which nonetheless are not readily sold (as evidence by A's attempts to sell them, with little success), and perhaps of an unknown value because of this difficulty to sell and because of the uniqueness, rarity, or other characteristics of the items in question.
Suppose at some point in the future, say some number of years in the future, A has great success selling these items. Obviously, the IRS would like to take as much of the proceeds from such sales as possible, and they would be interested in how A calculated his cost basis for the items, i.e. for the purposes of calculating the tax liability with respect to the capital gains tax to be levied (if any). So in particular, the IRS would be interested in what the basis was reset to, i.e. what the value was at the time of death.
But A didn't think to have them appraised, and indeed, it may be the case that a professional appraisal would cost more than the amount of cash A holds at the time of death. A has an idea of what the valuation was at the time of death, based on auctions of similar items, or past sales by the person A inherited from, etc, all 'indirect' means of establishing the valuation.
It seems like an 'innocent until proven guilty' situation: is A required to prove that their assessment of the cost basis is justified, or is the IRS required to show that this assessment is not justified? In this case, it is not reasonable to require that A have had professionally appraised the items soon after the time of death.