Here's what I think may be the attorney's reasoning. The property receives a step up in cost basis to the fair market value of the property on the date of death. If the property is subsequently sold, there is a possible capital gain or loss on the sale - the difference between the net sale price and that stepped up cost basis.
For real estate, there is always some guess work in establishing fair market value. Not all property is exactly the same and the market is not nearly as liquid as it is for, say, stocks and bonds.
In many probate cases, if the property is sold during probate, the actual sale price is used as the best estimate of the fair market value at the time of death. Therefore, for income tax purposes, there is no gain.
On the other hand, if $87K is established as the fair market value for probate purposes, you keep the property and subsequently sell it for $120K, there will be a gain.
Your problem appears to be that wide difference in estimates of the current fair market value. I would suggest that you have an appraisal or two performed by certified appraisers rather than using realtor estimates.