The $11.58 million exemption you are referring to is estate tax, not income tax. Income earned by the estate assets will pay income tax as long as the assets are generating income after date of death and before the estate is closed. The 1041 form is to report the income earned from the assets in the estate. The $11.58 million exemption is related to form 706. Additionally, the tax rates for trusts and estates are very steep so you will want to distribute out any net income to beneficiaries before the one year is over so the estate income will be taxed at the lower individual tax rates. The advantage of a revocable trust is the assets bypass probate and the trustor can designate who will receive the assets.
