If the deeds to the properties at the time of the sale were in the name of the estate, the estate reports the sale. without a will, state law dictates whether the income/gain must be or can be distributed to the beneficiaries. so you need to contact the executor to find out what's going to be done. the proceeds can be a non-taxable distribution of corpus or a taxable distribution of income. even if taxable, not all the proceeds would be taxable only the income portion. if the estate's income will be distributed you will get a K-1 to show what you need to report.
