A Texas couple accused of the gruesome killing of their pregnant special-needs daughter were indicted on capital murder charges on Friday (July 1).

James and Debi Holland could face the death penalty if they are found guilty in the February slaying of 18-year-old Holli Jeffcoat and her unborn baby, the New York Daily News reported.

About 10 weeks before her death, the teenager told counsellors at Lorenzo High School that James, her stepfather, had raped her multiple times - and she revealed that she was pregnant with his baby.

Investigators said the abuse dated back to at least 2008. Prosecutors said the Hollands killed Jeffcoat, who had special needs, in retaliation for reporting the abuse.

Another relative found the teen's mutilated body inside the family home on Feb 10. Her throat was slashed, her uterus had been cut out of her belly and her body was covered in other stab wounds, police said.

It appeared as if there had been an attempt to burn her body as well. She was 13 weeks pregnant when she was killed, investigators added.

At the time of the murder, James had been ordered to stay away from his stepdaughter as police were investigating her rape allegations.

The charges from the Friday indictment set the Hollands' bonds at US$2 million (S$2.69 million) each.