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No since the estate is not taxable (below $2 mn. for 2006)...you do not have to file an estate tax return. You also do not have to file New Hampshire estate tax return(below $1 mn. for 2006)
The heirs will inherit the property and the cost basis to the heir will be the fair market value of the property on the date of the death of the mother. The heirs will have to report the capital gain on sale (which will not be much as they get a step up in basis) and pay tax on the gain.
You will also not owe any inheritance tax if you are the son/daughter of the decedent.
Let me know if you have any question.
Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.
The estate includes the house at fair market value(step up basis) as of the date of the death so if the house value as of the date of death was $90,000 than that will be the adjusted cost basis and not $6000(paid 54 years ago). So if the house is sold for its fair market value....there is no question of capital gain....and hence no question of any taxes due....However, if there is a gain than you need to file Income tax return for an estate (Form 1041) and report the gain and issue K-1 to each of the beneficiary reporting their share of the gain.
Every domestic estate with gross income of $600 or more during a tax year must file a Form 1041. If one or more of the beneficiaries of the domestic estate are nonresident alien individuals, the personal representative must file Form 1041, even if the gross income of the estate is less than $600.