Capital gains tax of secondary home sale in NJ

[Chris Durbin]

Hello,

I am trying to figure out the capitals gains we would incur on the sale of a secondary home on the Jersey shore for tax strategy purposes. The property has been in my family for 4 generations, so the value of the property has increased immensely over that time. Ownership was passed down as a gift to two heirs. One heir bought out the other for $300,000 (1/2 assessed value), which is what was recorded in the county tax records.

My question is: Does the cost basis for cap gains tax begin at the buyout sale price or the assessed value at the time of buyout?

This property has never been an incoming producing asset, and has always been a secondary residence. Current owner resides in FL. What are some tax efficient strategies that this asset may qualify for?