Estate Tax Difference between appraisal amount and actual selling amount of property.

At my Daddy's death my Brother the Executor of the Estate had the property appraised and filed a Form 706 and got a clearance letter from the IRS. We held onto the property (rented the trailor out that was on the propety) for about two years. The property value increased a lot. It is in process of being sold (actually will be closing soon). We were wondering should we report the increase to the IRS and what is the chances that they will find out about the difference. It is probably best to file because the longer one waits the more penalty and interest that will accrue. How would the additional amount be reported (difference betweeen appraisal and actual sold amount)?
Deb1948 Georgia

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Deb

The property would be valued at date of death for estate tax purposes but the increase in value is capital gain -- ask the accountant how to handle this.

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