Final answer:
Darrin's adjusted basis in the primary residence he inherited from Kathi would be the fair market value of the property at the date of Kathi's death, which could reduce potential capital gains tax upon resale.
Step-by-step explanation:
When Kathi passed away and left her share of the primary residence to Darrin, Darrin's adjusted basis in the property would generally be the fair market value of the property at the date of Kathi's death. This concept, often referred to as a step-up in basis, means that the value of the property for tax purposes is 'stepped up' to its current value, rather than being based on what Kathi initially paid for it. This can significantly reduce any capital gains tax Darrin might owe if he decides to sell the property later on. However, different factors such as the location of the property and local laws can affect the adjusted basis. Therefore, it's advisable for Darrin to consult with a tax professional or estate attorney to understand the specific implications for his situation.