You are correct in respect to the fact there would be no capital gains since the selling price is the same as the value on the date of death (appraised) value. The cost and selling price would be the same or a loss when including selling expenses. The cost to the decedent would have no effect on the tax return.
When determining filing requirement for federal purposes, it's the selling price (attributable to appropriate beneficiary) that determines filing requirement. The cost must be shown on the return to show the net result. If a beneficiary doesn't meet the filing requirement, including their portion of the sales price, then a federal return wouldn't be required.
The filing requirements based on filing status can be viewed in the charts for federal and state below:
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