I see that you say your mother in law has a life estate (I missed this the first time through). If this is correct, and if the 2018 transfer was correct (either your mother in law was competent at the time or there was an appropriate power of attorney or other arrangement) then your husband will receive a stepped-up basis on the death of his mother and any taxable capital gains would only be on the difference between the selling price and the fair market value on the day she died (which is likely to be minimal).
However, a review of the entire situation by an elder law specialist is still advised, for several reasons including Medicaid protection.
