Then you are a bigger moron that we thought and should immediately resign your position as a United States of America SENATOR. Idiot, moron, stupid jerk, traitor.
I think this is absurd, close to my neighborhood. This property is actually a former chicken coop, that was converted to a 540 square foot house; now listed at $799,000.00.
The basis of the house should have been adjusted at the time of your mother's death. That is, the value of the house at the time of your mother's death is the new basis of the house. It should be higher than the original basis of $20,000.00; and you can include all the improvements to the house. The taxable amount will be the (sales price minus the closing costs) minus (the basis of the house plus improvements)minus ($250,000.00) exemption. I suggest you find an Enrolled Agent (tax professional registered with IRS) to help you with this BEFORE you sell.