For purposes of my answer I am assuming your Father is not survived by any spouse.
The U.S. imposes an estate tax on estates of decedents with a net taxable estate in excess of $1,500,000 (rising to $2,000,000 in 2006). The net taxable estate is defined as the gross fair market value of all the decedents assets less allowable deductions such as outstanding mortgages, other debt, funeral expenses, estate administration expenses and other final expenses. The botXXXXX XXXXXne is that there is not even a requirement to file an estate tax return unless the gross fair market value of your Father's assets exceeded $1,500,000 (including any taxable gifts made in the three preceeding years) before allowable deductions.
TN does also impose an inheritance/estate tax that is designed to be the equivalent to the maximum allowable U.S. credit for state death taxes paid (albeit you may no longer take a credit, just a deduction on the Federal estate tax return). For 2005 the first $950,000 (rising to $1,000,000 in 2006) of the TN net taxable estate is exempt from TN inheritance/estate tax. Any net taxable estate above than amount is subject to an inheritance/estate tax calculated on a progressive scale with rates ranging from 5.5% to 9.5%.
So unless the net value of your father's estate exceeds $950,000, its unlikely his estate will be subject to any estate tax. Meanwhile, any gains he incurs as a result of selling the property while he is alive will incur income tax. Thus his heirs are left with the after-tax value of the estate. If he lets you inherit the property, you will receive a step-up in cost basis to its date of death fair market value. This would allow you to sell the property (if you want to) with minimal income tax consequence. Alternatively, your Father may have the ability to gift you the property in question. If properly structured he may gift up to $1,000,000 (or potentially more) before he has to pay any gift tax.
I highly recommend you take your father to see a qualifed CPA or tax attorney who can explain the income and estate tax consequences of what he is doing. He may be costing you more money by selling then he would by letting things alone. Have him spend $500-$1,000 on a consult and it may save the estate thousands.
Do not attempt to sell the property for $1 or undertake any other strategy until you have consulted with a qualified advisor. A sale for $1 is really a gift that may result in a required information return filing (i.e. Form 709) and a gift tax liability. As I indicated above there are numerous ways to accomplishing your Father's wishes while reducing the tax impact (if any) to the minimum necessary.
Because it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.