The capital gain will be taxable income for the wife and should be reported on the US tax return. The gain is (selling price) - (basis) - (selling expenses). It will be taxable as long term capital gain - not more than 15%. State taxes are extra. If any taxes are paid in connection with that income in the UK - the tax credit for taxes paid abroad may be claimed.
In case you transfer the money to US - because the amount is more than $100,000, you are required to file form 3120 - http://www.irs.gov/pub/irs-pdf/f3520.pdf (see instructions for details - http://www.irs.gov/pub/irs-pdf/i3520.pdf) to declare transfer from the foreign country. There is no tax associated with this form.
Please let me know if any clarification needed.
For a recipient of the gift - do not need to claim it as income. Please see for reference IRS publication 525 page 30 - http://www.irs.gov/pub/irs-pdf/p525.pdf
Gift tax is a responsibility of a donor, but as the donor - your wife's mother is not an US person - there is no any responsibility.
The basis for the gifted property is the same as the donor had at the time of the gift. That is in general a purchase price of the property adjusted by improvement expenses over the time, expenses to obtain a mortgage and refinance (if any). Were the property ever inherited? If yes - there would be different rules? Exchange rate at the time of each transaction should be used.
It doesn't matter who owns the account, but who owns the funds. Do spouses file joint return?
You do not need to add any documents to the schedule D, but you may be asked in case of audit.