Capital gains when spouse dies

[Ashton Karp]

Hello, BP. I have a situation that I would like the hive-mind's thoughts on. 

How will the formula for Capital Gains be affected after a spouse passes away?

Real life example for clarification. 

Home is purchased in 2002 for $325,000 and used as a primary residence for the duration of ownership. 

Husband passes away in October 2021. Home is sold in August 2022 for $900,000. The home is in WA state, a community property state. 

How would capital gains be calculated in this situation? I am not looking for a number, but an understand of the process when a spouse dies. 

Is there a step up in basis for the husbands half of ownership, will there be a $250,000 or $500,000 homestead deduction, and are there other mechanisms in play that I may not be aware of?

The seller has consulted their CPA but I am looking for a better understanding here. 

Thank you, everybody!