Thanks @ShirlynW for your thorough reply. Your assessment agrees with my understanding, Now for part two of my question:
A zero coupon municipal bond was distributed in-kind from an estate to a beneficiary. The beneficiary then immediately sold the bond with a small capital loss. The decedent was a resident of the state in which the municipal bond was issued, however the beneficiary is a resident of another state. Is the beneficiary liable for tax on the interest which accrued while the bond was held during the life of the decedent? Or only for the de minimus interest which accrued during the time between distribution and sale?
