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The cost basis will be the fair market value of the house as of the date of your father's death since your mother inherited it from him. You cannot use the 2002 dollar values. However, if you mother made any improvements to the property after inheriting it than you can increase the cost basis with such improvement costs.
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Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.