A trust or estate and its beneficiaries, or payable on death beneficiaries, get a step-up in basis to fair market value of the asset so received. That value is stepped up to the fair market value of the asset as of the date of death of the Decedent.
DID the executor of the estate use a stepped up basis? If they did not then have the amend the return.
If they did then the K-1 form passed thru only the profits on the sale which are taxed on a personal beneficiaries return as long term capital gains at a much lower rate than the much higher estate rate. In the long run, the beneficiaries get much more money by having it taxed this way.
