Is money transferred from bank account to trust after grantor dies considered income for the trust or is it part of trust corpus? Do I list it on Line 8 of the 1041?

[wgen2]

I know that when a grantor funds a trust the money is considered trust corpus.

The grantor passed last year and I as trustee had to move her bank accounts in to the trust.  Since the grantor did not fund the trust when she set it up, is it considered income and would I have to show the amount on Line 8 of form 1041?

Any help would be appreciated.

[jtax]

It is not usually income. It is a gift and gifts of corpus are not taxable. https://www.law.cornell.edu/uscode/text/26/102

It could be income if it were a gift of income (e.g. a gift of the interest on an asset, but not the asset itself). This is not common.

More likely an issue is this scenario. If, for example, the grantor has $200, 000 in an account, dies on 5/20, and$100 interest payment is credited to the account on 5/31 and on 6/1 the whole account is transferred to the trust.

Then the grantor's estate has $100 of income. If the estate will is open on 12/31 it will file a 1041 and pay tax on the $100. If it is closed before 12/31 it will file as 1041 showing the $100 distributed to the beneficiary (perhaps the grantor trust) and the bene will pay tax on the $100. [Note a estate needs $600 of income to have a filing requirement and there is a useful option to elect to have the estate and a certain trusts "merged" for 1041 purposes for two year.]

No one pays income tax on the corpus of $20,000 because it is a gift of corpus.