Fair Market Value

The FMV best accepted by the IRS is an appraisal by a licensed real estate appraiser. Next would be estimates by several realtors. 

The fair market value (FMV) of inherited property is typically the value at the date of death unless the executor elects the alternate valuation date, which is six months after the date of death. For more details, you can refer to the IRS guidelines on determining the fair market value of property,

This value can be established through a professional appraisal, which is considered the best evidence of FMV.  Second option: Comparative Market Analysis (CMA): Get a local real estate agent to compare your property with similar ones recently sold.

See IRS Publication 561