Unanswered here is where and why the assessed value was used.  In Michigan, for example, the probate court filing fee is based on the value of the estate, and if the executor  hasn't yet hired an appraiser, the court says "The fair market value is often arrived at by doubling the state equalized value (SEV) for the property."  In any case, IRS doesn't care what number was used for other purposes, and won't accept anything that is either too high or too low.  

The property may have increased in value from date of death to date of listing, but probably not more than the selling expenses.  This molehill has been turned into a mountain by the false assumption that some number used elsewhere is frozen for eternity as FMV.