Since the estate is selling the decedent's primary residence, the estate can use the 'stepped up' basis.
If the home had sold the same year the decedent passed away, on the decedent's individual return, the primary residence exclusion could have been used.
Here's more info:
https://turbotax.intuit.com/tax-tips/rental-property/cost-basis-tracking-your-tax-basis/L4i1f9qB1
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