Generally speaking, the sale of the decedent's personal residence results in:

A short-term loss.

A loss caused by the expenses of the sale when these expenses are not deducted on Form 706 as an administrative expense.

A loss that is deducted on the estate's Form 1041, without any consideration to what the beneficiaries actually do with the property after the decedent's death.

A loss that is not allocated to principal, therefore not limited to $3,000.