Depends on his situation. For example, if Dad is now deep in debt then transferring back the interests in the home the the kids now hold would but those interests at risk for creditors. Or if Dad might need expensive medical care after the Medicaid look back period is gone then the transfer back to Dad risks those interests going to the state when he dies. And of course there is the possibility that Dad decides after getting those interests back that he doesn't want to give the house to the kids after all and does something else with it instead. There are other possibilities and I'm not going to try to list them all, but you hopefully get the idea. Tax is not the only consideration here.
You've received good advice thus far and just to reinforce things, it is always a good idea to have a Will (and/or Revocable Living Trust) and a set of up to date auxiliary documents, such as a Springing Durable Power of Attorney, a Health Care Power or Proxy, etc. Some examples -- what if one of the 3 children who was expected to inherit and share becomes disabled, dies, gets into a financial crisis (so his or her share of the house goes to his or her creditors) or a divorce situation (so his or her spouse seeks a share of Dad's house or the equivalent in cash), or if they cease to get along? What is one wants to live there and 2 want to sell? As to rectifying the current title situation, that needs a lawyer to look at things. All of those things is far less expensive and stressful if done sooner rather than later. Depending on the state involved, the smartest thing often is to re-transfer title to a trust, with the 3 children named as its beneficiaries, and have the trust specify what the 3 children now agree should be done when the day comes.