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.