Since you already distributed the income the best thing to do is to pass this income through to the heirs as @dpendl suggests above. You will prepare a form 1041 which will have all of the income from the 1099-R and a 1099-B if you receive it. Then you will need the name, address and social security numbers of all 10 heirs as well as their percentage of the inheritance. You will enter all of that information into the 1041 and then the estate will not owe taxes on the money that it earned, the heirs will enter it on their personal tax returns and pay the taxes out of the inheritance that they received.
Here is some guidance on filing a 1041 with TurboTax.
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