Very true about the stepped-up basis.  His application of the mechanics makes sense, at least in my opinion.  

At least the mother won't have to pay any capital gains on her share of the money and the kids will (both federal and state).  What was upsetting was that they were fine with her paying all the yearly expenses on the vacant house after she moved out and stopped benefitting 2 1/2 yrs ago.  The kids were expecting to benefit from her paying to keep the house in decent condition and not pay any taxes when she dies - whenever that might be.