sorry for your loss. by law any income received by your mother before she passed goes on her final 1040. after that it goes on the estate income tax return form 1041 not her 1040. So cashing out the IRA, selling the house and stocks post-mortem should have gone on form 1041 for her estate. The stocks and house would get a date of death value so there should have been little or no gain or loss if sold shortly after she died. The IRA does not get a date of death value and there are special rules if she was required to take an RMD. I won't go into the financial aspects of "selling everything". if she died intestate (no will or trust holding the assets) state law decides on what the executor can do. Even with a will or trust, most states give the executor discretion as to whether to pay the income taxes at the estate (1041) level - no k-1 to beneficiaries. they split the remaining assets tax-free or the executor distributes the income via k-1s to the beneficiaries, and they pay the taxes on the income.
