It would seem there is little to no gain on the sale since it would have a stepped up basis for the beneficiaries. If it was sold closely to the time of death within a reasonable time frame then the selling price and cost basis would be very close to the same depending on the sales expense.
For the beneficiaries, gain or loss, if none of then loved in the home, would be an investment income and carried as such to the K1s. Check the distributable net income for the trust, it may need to go to the beneficiaries immediately via the K1. Based on your comments it s 'simple trust'.
@wtflanders
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