It makes zero difference how you received the payment. You still will incur capitol gains if the land is selling for more than it was valued when it transfered into the trust. It will be figured on a per acre basis. So if ten acres sold and covered $10,000 of taxes and it was valued at $2500 when it went into the trust, there would be income of $7500 that would be subject to capitol gains. The form of payment makes no difference. You still received $10,000 of benefit. The biggest part just went to pay delinquent taxes.
Think about it this way. You are selling the land for the amount of the taxes plus some closing fees. This is still income. It just is being diverted to pay the taxes on the whole property.
Before this deal closes you need to talk to a tax person in your location. You may sell the property and have the taxes paid but then own the IRS the capitol gains tax.
I saw this happen to guys in the 1980s. They went broke. They gave the farm back to the bank. The bank took the ground back for the amount owed on it. The guys did not file bankruptcy. The IRS considered it sale with the bank being a buy with the purchase amount/price being the loan payoff amount.
Here is how they incurred a tax bill. They originally bought the ground for lets say $1000. The land increased in value but they did not sell it they used the addition value as collateral at the bank. The bank loaned them money based on this increased value. So let that value be $2000. The farmer spent the money on whatever and then could not make his payments. So the bank took the farm back. In the IRS's eyes the bank paid $2000 for the land. The farmer owed capitol gains on the $1000 increase in the land value.
Two different guy I know had to declare bankruptcy after they voluntarily signed their farms back to the bank because of tax issues. One was hit with a $350,000 tax bill on the capitol gains and the write off FHA did that was counted as income as well.