The crux of my question relates to the meaning of the phrase "acquired from the decedent" as it appears in IRC Sec. 1014(b)(9) and Reg. 1.1014-2(b)(1).
In the following scenario, has the property been acquired from the decedent?
A transferred her vacation home 10 years ago to an irrevocable trust of which her children were the trustees and beneficiaries; there are no provisions in the trust document that would make it a grantor-type trust and no provision that specifically allowed her to continue to use the property. She nonetheless continued to use the property as her own until her death, paying all expenses for repairs, maintenance, and improvements. I'm pretty sure IRC Sec. 2036 will result in the value of that property being included in her estate. If it is included, will the trust get a step-up in basis? Has the trust acquired the property from the decedent? To me it seems that the answer is "no" since it already had fee-simple title to the property.