Trust issue

[New York Enrolled Agent]

1. Who is correct?

Not the attorney.

[Lion]

First, read the trust document.

[Consultant]

Grandmother formed Trust in 2000. Grandson is Trustee. Only item to Trust was her house. She passed away in 2005.
Grandson rented property until May 2021 when he sold it. Grandson's two children are the beneficiaries. Using basis set
up in 2005 a gain of 50-60 K is apparent from the sale. My somewhat limited knowledge of this situation tells me that
2 K-1's at 50-50 capital gain profit will be issued via the Trust. However, client has insisted that he was told by an attorney
during another issue that the Trust proceeds are NOT taxable because this is an inheritance.
1. Who is correct?
2. Does a step up basis apply to this situation?
3. Form 1041 should be filed since the 1099-S is in Trust's ID?
4. Would a will have been better?