It sounds like the IRS form 1099-MISC was royalty income. Oklahoma will claim that income and tax it. Whether those are the forms used or not, it is hard to say without seeing his tax return information.
If he received a cashier check, that may very well be the sales price. Is there not a sales summary or contract or sales invoice that reflects all of the incomes and expenses?
Withdraw refund and capital gain, it is possible but it is hard to say without seeing the tax return information.
Per IRS Publication 551 (page 15), the cost basis of property inherited from a decedent is generally one of the following:
- The fair market value (FMV) of the property at the date of the individual's death.
- The fair market value (FMV) on the alternate valuation date if the personal representative for the estate chooses to use alternate valuation.
- The value under the special-use valuation method for real property used in farming or a closely held business if chosen for estate tax purposes.
- The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement.
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