Most taxpayers are familiar with the step-up basis rules for inherited assets [IRC §1014]. Fewer taxpayers are familiar with the holding period rules.
Assets acquired from a decedent (to which IRC §1014 applies) automatically receive long-term holding period treatment when sold (either by the decedent’s estate or a beneficiary). [IRC §1223(9)]
From IRS Publication 544 Sales and Other Dispositions of Asset:
Inherited property. If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it.
From IRS Publication 559 Survivors, Executors, and Administrators:
Holding period. If you sell or dispose of inherited property that is a capital asset, you have a long-term gain or loss from property held for more than 1 year, regardless of how long you held the property.
N.B. Since IRC §1223(9) makes specific reference to IRC §1014, then it doesn’t apply to asset acquired from a decedent to which an executor makes an election to apply IRC §1022 (Treatment of Property from a Decedent Dying after December 31, 2009). In that case, IRC §1022(a)(1) directs that property is treated as having been transferred by gift. The gift rules for holding period [IRC §1223(2)] direct that the holding period tacks on to the decedent’s holding period.
See AICPA Letter Request for Guidance on Modified Carryover Basis Rules under Section 1022, Question #5 “What is the holding period for property acquired from the decedent’s estate?”