looks like part was removed and with the gut out you have a grade difference or something. You need some mud to level I think but did someone do work there ? looks not finished . You could get it cased and trimmed out . those returns always get scuffed around an entry or passage or stairway in this case . Looks like some stair tread work is in order too. You could get a carpenter and fix up the whole situation for the better....get a handrail to work in too. [looks like steep stair grade]