re: Can someone explain the “ins and outs” of inheritance tax for me?

On a federal level, the estate tax is assessed on the estate (i.e. before assets get to the heirs). You can leave after you die / gift while alive over 5 million per person, plus an unlimited amount to your spouse (plus an unlimited amount of smaller gifts over your life). Odds are unless your wife's family is loaded, this will not be an issue.

A few states have their own estate tax or an inheritance tax (a tax on the assets in the hands of the heirs). Most southern states have neither, Louisiana nor Texas does.

When someone dies, their basis in their ownership of the assets "steps" to the FMV of the asset at the time of death. Any income from the asset (such as dividends) is taxable just like regular income.

In the case of the house, when you get the house at death, your basis is 400K. If you sold it, you would pay capital gains tax on the gain using 400K as a basis. (assuming you didn't personally live in it after getting it before you sold it)