You (or the trust after it became irrevocable) can take a depreciation deduction for the time period after the death of your mother-in-law through the date of the sale (real estate is an exception to disallowing depreciation for personal property held one year or less).
The loss would be a Section 1231 loss (ordinary) and note that the depreciation deduction you take will be immediately recaptured but the Section 1250 recapture would be absorbed by the loss on the sale.
