The cost of repairs and improvements after the owner's death can be added to the basis of the property. Property distributed from an estate to its heirs retains its basis, so that number will be the same whether the house is sold inside the estate or distributed to the heirs and then sold.
Due to the compressed tax brackets for trusts and estates and state income and principal laws, it's possible that selling the house from the estate could be more costly than a sale post distribution. At the very least, it's safe to say there are no adverse tax consequences to distributing the house to the heirs who then sell the property. You can follow this link for a thorough discussion of this point. http://www.journalofaccountancy.com/issues/2014/apr/trusts-estate-planning-20138750.html
