I read that exact section that you highlighted, but I wasnt sure what constituted "others as substantial owners".   I could see it if the house was co-owned by the trust and someone else on the title.

I'll need to talk to the trustee again.  The house was all there was left, I'm not sure why they waited so long to sell it.

So the other beneficiaries wouldn't get the exclusion, how would it only be allocated to one of them?  The mechanics of reporting it on the return seemed to trip me up enough that it didnt seem like it was right..