TP decease 2012. Estate consisted of house only. Exec paid all bills of the estate including re taxes, ins, water, bills etc to prepare this house for sale. In 2017 Estate sold the house, paid back the Exec for every thing she paid for then distributed the remainder to the heirs. In the accounting provided the commissioner of accounts who accepted it and signed it as now closed allowed all the payback (very detailed with checks and receipts). The 1099 for the sale was issued in the estate name and FED #.

since IRS will be looking for this income in the estate # 1: show this sale on a 1041 and the distributions accordingly? #2 Since all the bills were deemed paid by the estate at closing can they be used in the filing the 1041 return?

No 1041 forms ever filed.

The will directed that the real estate be sold to effect a cash distribution to the heirs.

Suggestions on how to proceed.