As said- the Handy Gun is a National Firearms Act weapon- like machine guns, cannon etc- EXCEPT it is an Any Other Weapon (AOW)- transfer tax is $5 instead of $200.
FIRST thing is to get the gun transferred to you. With a registered INHERITED NFA arm, it should transfer to you with no tax- contact the ATF for guidance. To sell it, I would find a dealer with a license to sell NFA arms. Value runs ABOUT $500-$750. But unless you really need the money right now, I would get it transferred to me, and just hold it.
What we have here is... failure- to communicate.