The three siblings who sell their shares have no income tax implications as long as they sell for less than fair market value (of their share) on the date of the previous owner's death. They may need to file gift tax returns.
The 4th sibling (buyer) will need to document the transactions thoroughly, the purchase portion and the gift portion, so they can document their cost basis when and if they sell. I can't remember whether the gifting aspect changes their cost basis, but for now it will be enough to document everything. (Appraisal, gift letters, quitclaim deeds or other records of the transfer of ownership and price paid.)
