I am sorry for your loss.
The deed could take precedence so it depends the deed. How did your father and step-mother hold title?
Regardless, if the estate did, in fact, acquire the home after your step-mother passed, then there would be a step up in basis to the full fair market value at that time (i.e., FMV in July of 2023).
A 1041 would be required since the gross proceeds would be more than $600 and the basis would need to be reported on the 1041.
