<<<My Dad owns a house with about a $500,000 current market value, and about a $25,000 tax basis. He is a widower.

Is there any way he can shield more than $250,000 of the gain upon sale from federal taxes?>>>

"He could get married.

Or contact a real estate attorney and ask if a 1031 tax-free exchange might be useful."

In addition to the other fine posts, especially the one about improvements and step-up on his spouse's prior death, not all of which I quoted, he could continue to own the house until the day he dies and pass it along by will and the inheritor would receive a stepped-up basis.

Regards, JAFO