Deductions & credits

Again, all of the question of what happened to the proceeds of the sale of the house is dependent on the action of the Personal Representative.  Creation of a Schedule K-1 per beneficiary and its contents are dependent on that individual's actions and not the actions of the beneficiaries.  Pretty much the last several posts are outside the context of the simple question originally asked.  
The original poster, jjh2006, would have to expand the question with any information on whether or not the Estate recognized a gain or loss, and whether the Estate's Personal Representative made decision, based on the Estate's taxation situation, of whether any gain, if existed, or any loss, if existed, would be assumed by the Estate or passed through.
Trying to create an answer that fits all possible posters' question, without the specifics of the situation, can add complexity beyond OP's (jjh2006,) intents.

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