2017 you filed Form 1041.
2018 The bonds that paid interest in 2017 were liquidated and proceeds distributed to beneficiaries. However, during 2018, did those bonds pay interest in the name of the Estate? If so, was the income received by the Estate and then distributed to the beneficiaries?
If the Estate received $600 or more in 2018, it must file Form 1041, and it sounds as if the 2018 will not be the "Final" return. If the income was $600 or more, were the proceeds also distributed?
Even if the Estate received less than $600 in 2018, the assets were still distributed - namely the cash proceeds of the bonds.
Is the Estate of size such that it will be subject to filing a Federal Form 706 Estate Return [$5.6 million or more]?
The point is that if the Estate had income that was not distributed then it could apply the allowable deductible expenses itself against an income tax liability, but not if it had no income and the income was distributed in 2018.
By filing Form 1041 in 2018, the allowable deductible expenses could be passed to beneficiaries. However, of the expenses you explicitly list: Attorney fees and property tax paid on the decedent's house and paid by the Estate, the problem is that in 2018 attorney fees are not deductible except against business income. The beneficiaries did not receive ownership of the house and the house has not been sold anyway. Were the expenses paid out of Estate assets and those assets did not generate income? The difficulty is that it is not at all clear from what you have written that the bond proceeds (asume only principal) had any connection to the expenses (and what credits? - not stated) paid.
Clearly, a complete answer hinges on the actual question of whether or not the Estate received income or not, and if that income before being distributed would have been sufficient to have paid the cited expenses.
Be aware that when the house is sold, it is treated as an investment assets, with reported gain or loss but no personal residential exclusion.
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