Hell-o

I am filing a 1041 for my late husband's estate. Tom inherited a 50% interest in a land development LLC in 2006 at a value of approximately $148,000. His death was early in 2014 and I am filing a short year 1041.
In 2014, the 50% interest was appraised at $80,000 and sold for $50.000. The $80,000 value will be reported on Form 706 in inventory by the attorney.
Is this the sale of business property and reportable on Form 4797, or is it a capital sale to be reported on Schedule D?
I am the only beneficiary and would like to know the timing of the loss flowing to my personal return.
The difference between these options is how the loss is applied, right? If Scehd D, then limited to $3000, if Form 4797 entire loss could be taken this year (thus I would convert traditional IRA to Roth).