@ron6612 wrote:
The only distribution is the net income less the allocable expenses. I really think the entity type should be estate, not trust since it is separate from the decedent. This is an initial and final 1041 estate income tax return for my mother.
If the trust meets the following requirements, it is a simple trust:
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The trust instrument requires that all income must be distributed currently;
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The trust instrument doesn't provide that any amounts are to be paid, permanently set aside, or used for charitable purposes; and
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The trust doesn't distribute amounts allocated to the corpus of the trust.
You stated that your mother had a revocable trust and, if funds were paid into the trust, then the proper entity would be a trust, not an estate. A revocable trust becomes irrevocable upon the death of the settlor (that would be your mother) and is treated as a separate, potentially taxable, entity by the IRS.
