Something odd here. If I recall correctly, the income tax rate on estates is higher than on personal tax returns. The heirs would likely keep more money in the end if you passed the income to them and let them pay the tax on their tax returns. This would happen via the estate's tax return and the K-1 statement issued to each beneficiary or heir. (As to your exact question, if the estate pays the income tax, the heirs do not, and this will also be reflected on the K-1 statements. But this may not be the best way forward.)
Also, the statement "we had a home that we inherited upon her death that was not part of the estate" is almost certainly wrong. Was the home in a trust? (It would be part of the estate for IRS valuation purposes, but not part of the estate subject to probate.)
If a 1099-S was issued, it would have been issued at the closing. Who attended the closing? Did you have an attorney or closing agent?
I agree you should seek professional assistance.
