Your mother-in-law can qualify for the $250,000 Section 121 exclusion from gain if she owned and used the home as her main home for a period aggregating at least two years out of the five years prior to its date of sale (she is apparently eligible from the facts stated in your original post). Since she only received $140,000, her basis is essentially a moot point and she can exclude the gain, if any.
Your wife and her 4 siblings will have to figure their gain based on the fair market value of the house on the date of death of your father-in-law plus any improvements that have been made over the years (for which they will need documentation). Assuming none of the aforementioned used the house as their main residence for at least two of the last five years prior to the sale, they do not qualify for the Section 121 exclusion. See https://www.irs.gov/taxtopics/tc701
So, you need to figure out the fair market value (what the house was worth) on the date of your father-in-law's death, 37 years ago, add the cost of improvements made over the last 37 years, divide that figure by two (since the 5 siblings got a one-half interest), divide that figure by five (one share for each of the 5 siblings), and then subtract the resulting figure from the sales proceeds (less any sales expenses).
Example (with no improvements taken into consideration):
Hypothetical date of death fair market value = $100,000 divided by 2 = $50,000.
Five siblings basis each = $10,000 ($50,000 divided by 5).
Sales proceeds of $28,000 less sales expenses (hypothetical) of $1,000 for each sibling = $27,000.
$27,000 net proceeds less $10,000 basis = $17,000 capital gain (long-term).
