I had a lot of older relatives who were racist and ultimately I accepted it as something I couldn’t change and something that was very much tied to their background. My parents both grew up in rural Alabama. Until my parents were adults, public schools for blacks were rarely funded for more than 5 months per year, there were no buses and often no textbooks, the teacher might or might not have been to college, the school rarely ran through 6th grade, the nearest black public high school was more than 40 miles away in Montgomery and transportation was not provided, no truant officer gave a damn whether the black kids were in school or not and everybody turned a blind eye if black parents didn’t send their kids at all, and it’s hard to remember that this wasn’t some semi-mythical time where Indians riding velociraptors chased buffalo around the pyramids amorphous past but a time so recent that some of the students “educated” at these schools are still in the workplace.
Consequently, most of the black people my parents knew when they were growing up really were ignorant, usually barely literate, and just not scintillating conversationalists or good for much beyond menial labor. Because they had grown up in poverty and had no skills to get them out of poverty they, like people of any race or time or place who have ever lived in poverty for an extended period fo time, they often had to take some ethical shortcuts from time to time (i.e. in the best of times you will have some people who will lie/cheat/steal, but in very trying times many people who would otherwise gladly be honest will lie/cheat/steal by necessity). These things, along with the animosity between the races, led to a “most blacks are ignorant, you can’t trust them, and they’re not really like us” attitude that was, to a large degree (and for purely manmade cultural reasons) valid. (When they met blacks who weren’t ignorant, or weren’t poor, and weren’t eager to play the social inferior role, that reinforced their prejudices rather than challenged them, but that’s a long other story.
Anyway, my father was a bit more pragmatic and intellectual in his opinions on race, pretty much coming to see it as the above, but my mother, who had many friendships with black people- who had black people she absolutely unequivocally loved (and that’s not blindness or wishful thinking, she did) had these prejudices until her death. Her older sister who is still alive still can’t believe we have a n*gra president and views her grandson who has a baby with a Hispanic woman he’s not married to as only slightly superior to the white men who had not-secret-enough relationships with black women in her childhood.
I loved my mother, I like my aunt, and they’re not going to change. There’s no reason to think they will, so I look past it. They also smoked when they were pregnant and let their kids play with fireworks unattended and kept open pots of bacon grease on the stove that they used for everything and did other things you would raise eyebrows today but were de rigeur when they were young adults.
BUT, my understanding left if they were baiting me, and they both did sometimes. That’s not cultural or a timepiece, it’s just being a bitch.
For that matter my relatives who are middle aged: they’re not all racist, but the ones who are have racial views that are far less- if you’ll pardon the word- nuanced than those of the older generations I knew. It’s nastier and rawer and barely even tries to masquerade as reason based. I got into a literal screaming match this past weekend with a close relative who used a slough of racial slurs about Obama and his family and then SWORE “his race has nothing to do with why I hate him!” and pronounced herself free of racism, “I’m just stating facts”.
In any case, while I understand how possible it is to love somebody whose views you find repellant, I think the person also needs to have redeeming qualities as well and it’s not sounding like the dad in the OP has many. I’m all for cutting the ties that bind to toxic relatives, and frankly most of the regrets I have in life have much to do with NOT having done so. (Of course if the dad on the OP is well fixed financially it complicates matters slightly, but even then only if you think there’s a reasonable chance you’ll inherit before you’re too old to enjoy it.)