1. Yes you will need to claim your husbands share of the inherited property sale on his return. Doesn't matter how it is reported on the 1099-S. Ideally, your husband should have requested a corrected 1099-S form for his share. It's a little late for that now, so retain records/documents that will support your husbands share from the sale. The IRS receives a copy of the 1099-S also.
2. Enter the inherited property sale in the Investment section, Stock, Mutual Funds, Bonds, Other. Select second home, then enter your husband's share of the proceeds, date sold, inheritance for how acquired, date inherited property which is the date of death in 2014, FMV at date of death. Then gain/loss is computed. Had you sold in 2014 there might not have been a gain. But 5 years later, the property has likely increased in value, so a gain is calculated. Second home do not get gain exclusion treatment like your primary residence.
3.Yes, you will need to file a Colorado nonresident return, because this is Colorado source income. See this link.
4.Yes, whomever prepares the LLC should send a final LLC if the LLC was closed.
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