If the life estate was properly established and the title did not pass to you and your sister until her death, then your basis would be stepped up to the fair market value on the date of her death.
You would still have to claim the sale on your tax return. If the sales price was higher than the fair market value when your mother passed away (i.e. the property value went up in that short time) then you would still have a taxable gain.
If the sales price is equal to the fair market value at the date of death (i.e. it did not appreciate in that short time) then there should be no taxable gain.
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