Hello, I had some questions in regards to estate tax returns. Parent pass away in 2012, had a house as the only asset passed on to the estate, which is then sold within 1 year. The money is then distributed to the beneficiaries. The house basis acquires the fair market value at the time of death and is sold for profit? would this be considered short term capital gains? what if it sold for under?

Questions:

1. Besides the final 1040, would we need to file a 1041 to show the sale of the house, repairs, fiduciary fees, and other expenses? income or loss?

2. Would the beneficiaries receive a K-1 from the 1041? what would be the tax ramifications on this to them? would they need to pay taxes?

3. What kind of state estate form would need to be filed?

Thank you

J