[jwasbury]

If the property passed through the estate, it was included in the estate (and potentially taxed) at fair market value at that time and the tax basis of the property in the hands of the trust should be the same value. I'd expect the trust should have been filing it's own tax returns to report the oil income and reporting that income to the beneficiaries on K-1 forms. In the event the trust sells the land, the difference between the tax basis and sales price should be long term capital gain, as you figured.

The only wrinkle I can think of is there are some funky tax rules re: oil and gas which I have no first hand experience with.