Thank you for your response.
So even if the new home is purchased in the name of the trust, it doesn't serve as a deduction on the 1041.
What we did was really a "shuffling" of the trust assets. My initial input into the 1041 resulted in a large amount of capital gains (taxes owed) even though the house was only valued at $225,000 and did not increase in value from the time the trust became irrevocable until the time the house was sold.
