1. If a couple is sitting on a $1 million capital gain on a home they purchased years ago for $250,000 then they will lose half the $500,000 exemption if one of them dies before it’s sold.
2. They’re probably in the lowest tax bracket they’ve ever been in, so their capital gains tax rate is likely to be very low (maybe 0%?).
if they keep it until they die, the basis resets to its current value and their children can sell it and pay no taxes on the sale, because there would be no gains.