I believe her cost basis would be that of what I had invested in it. Similar to placing her name on our home. For instance, assume I put her name on our home, for which let's say we paid $75,000 for it back in 1983. That would become her cost basis. On the other hand, if she inherited it, her cost basis would be the true market value at the time of my death - say $185,000. If she sold it for $200,000 down the road, her long-term capital gain would be $15,000 if inherited, rather than the $125,000 if her name was added to the title during my lifetime. Of course, the reasoning behind much of estate planning is to move items out of the estate as a protection for Medicare. Thus, if my cost basis on the car can be established at $30,000 and it is sold for $40,000, the capital gains are $10,000 rather than perhaps zero through inheritance, but the goal of removing it from the estate was realized.
Your point is excellent. It's a crap-shoot on some of these things, but the antique car is a decent bet on passing on valued things over a home purchased many years ago which greatly improved in value.
My biggest question here is how AACA feels about allowing Grand National status to be passed on vs. having to start all over. Can I turn it over to her and have her receive the Senior Grand National?