In your situation, it would be best to talk with a local real estate attorney.
Real Estate law is governed by the state.
A "Life Estate" may have just been put into place so that you and your sister would inherit the house without it gong to probate had your mother passed.
It MAY not mean you or your sisters were owners.
It MAY not mean you or your sister need to report the sale.
It MAY mean that your mother gifted you funds and if over the yearly limit (16,000 per person) , your mother may need to file a Gift Tax return.
She most likely would not owe tax on the gift, but she would need to report it on Form 706.
Again, you need to speak with a professional familiar with your situation. The attorney that set-up adding you and your sister to the deed would be the best person to speak with.
Gift Tax
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