Surviving spouses may exclude $500,000 of home-sale profits from taxes if they sell the house within two years of their spouse's death, as long as they owned and lived in the house for two of the five years before the spouse died.
So if he passed in 2018 an you sell in 2021 you are limited to $250K however you got a step up in basis in 2018 due to his passing ... here is a very simple example:
You bought the home together for $100K so you each had a basis of $50K.
In 2018 the home is worth $400K so you inherited 1/2 of the DOD FMV which is $200K + your $50K basis for a total of $250K.
Now you can sell the home for up to $500K without paying taxes. Of course this is a simple what if ... you also have to add in then closing costs to buy & sell and any improvements you made over the years you owned it.
