@Carl wrote:
As for capital gains, if the estate sold the property, then the sale would qualify for the "lived in 2 of last five years it was owned by the resident" capital gains tax exclusion.
No, the estate would not qualify for the "lived in 2 of last five years it was owned by the resident" capital gains tax exclusion. The estate would take the property at a basis which is stepped up to fair market value on the date of death.
