Death of partner in residential rental

[Kerry Malarkey]

I and my step-mother are partners in one residential rental property 50/50. I and my two sisters will inherit the rental. My step-brother will inherit her primary residence. My stepmother died Dec 25th 2023 (96 years old!). I have been managing and preparing the rental financials/tax statements/cash distribution for the last 15 years on the property. For the last several years we've been paying into a capital improvement reserve (via deduction from the cash distribution) for the purpose of replacing the roof. The reserve funds sit in a separate ‘Rental’ bank account. My question: Are those cash funds part of the rental property partnership, which would go with the rental property inheritance, or would they be considered separately in the probate?

A second question regarding stepped-up basis to market value. I presume the portion of the rental that was owned by my step-mother (50%), and that will be inherited by myself and my sisters, will have the basis increased to FMV. I had also presumed that my personal current ownership (50%) basis would not be stepped up, but recently was told this might not be true. Any further insight into this would be appreciated!

The property is located in Oregon.