Real Estate Law
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It actually would be better for sister to leave it to her in her will because she will receive it at a "stepped up cost basis" equal to fair market value. That means if she sells if within 6 months or so after inheriting it, there are no capital gains taxes.
The down side is that the property would have to go through probate which takes some time but depending on how long sister has owned the house, the tax savings would likely more than make up for the cost of probate.