Yes, the sales of the property must be reported. If they were sold once received by the beneficiaries then it will be reported on their returns. If they properties were sold while still in the trust then the trust return would report the sales and complete the K1s for each beneficiary. Likewise the mutual fund earnings after death and before distribution to the beneficiaries would be reported on the trust return.
As indicated by @Critter-3 you might consider professional advice for this year of ending the trust and the sales.
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