That could make sense.  "Typically," simple, irrevocable trusts only distribute interest, dividends, and short term capital gains (and sometimes other types of income).  Long term capital gains are "typically" retained by and taxed to the trust.  The computation of Distributable Net Income (DNI) (1041, Page 2, Schedule B) starts with Adjusted total income, but the capital gain is backed out because the Trust is going to retain it and pay taxes on it.

Are you sure that AMT is being calculated, or is Schedule I (Alt Min Tax - Estates and Trusts) being used to compute the income distribution on a minimum tax basis (which will flow to the K-1).

Has Form 8960 been calculated?  Even if the trust is not in AMT it sounds like the gain will trigger Net Investment Income Tax.

Have you read the trust document?