My father died 2005, and my mother died in 2010. After her death I her son, short sale their house in 2012. Now I received a 1099-C for mortgage forgiveness and a 1099-Misc for 11,445 for relocation assistance. Part of the relocation assistance was used to pay for the lawyer fees to go though probate. Do I need to file a tax return on my parents behalf and if so what form? Thanks!

If you represent your mother's estate, then, yes, you need to file a final tax return for her.

The short sale needs to be reported on a fiduciary return (Form 1041).

Strongly recommend you get professional tax help on this issue, or you may end up paying the taxes yourself.