one possibility is that this was a loan the lender made to the property buyer. in this case, there's likely no income from collecting the principal but the interest included is taxable. Another possibility is that this was seller financing from the property sale. In this case, collection of the principal would have tax consequences - as income in respect of a decedent (IRD). IRD is taxable in the same manner and amount the lender would have recognized on the collections. There may be other possibilities in this case clarification of the situation is needed.