> I suppose though, you can't just go on refinancing forever. One day he will die, and then it will have to come out of his estate, and I guess his estate may pay the capital gains tax then?

This is the best part. The cost basis for assets is stepped up on death to the price of the asset on the day that the decedent .. became the decedent. That becomes the cost basis for any capital gains tax the heir would owe if they sold the asset.