@DRPCPA , while I consider the advice by @Critter-3 , absolutely correct, I would just like to point out a few things that may help your discussion with the professional or if you choose to do it by yourself anyways ( and comfortable enough to go forth )
1. The trust at the instant of demise of the "trustor" changed to an irrevocable trust. At that point all you as an executor is follow the instructions.
2. Assuming that the trust and the estate are intertwined ( as is usual ), especially with a pour-over clause -- the disposition / liquidation of the trust is all per the instruction/ testament or probate judge directions
3.The properties in the trust all get the step-up / down ( to FMV) as per the state laws
4. If you are to transfer the ownership of rental assets, per instructions, then FMV applies to the basis but what happens to the accumulated depreciation ? It disappears with the demise of the original owner-- so it is a fresh start whether in the hands of the trust or the beneficiary -- state laws rule here.
5. Till the distribution of the rental assets , the incomes and expenses , while carried on the books of the trust, is best transferred to the beneficiary if the assets are also transferred to the beneficiaries. However these assets are disposed of , then directly or indirectly needs to close the books and file showing all the incomes , expenses and pay the taxes or by using K-1 transfer these to the incomes and liabilities to the beneficiaries.
That is my take on this -- and IMHO.
But I do agree that consultation ( while tight timing for 2021 tax year ) is very much advisable.
pk
@Critter-3
