If she owned the home jointly with her spouse up until his death, half the cost basis "steps up" to the fair market value on the date of death.
It may be best explained by example. He died 15 years ago when the house was worth $400,000. Her new cost basis is now $208,000 (half of $16,000 plus half of $400,000).
If they lived in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin), the entire cost basis steps up. Her new basis would be $400,000, in the example.
