This was my layperson's understanding, too, that the property is removed from the trust and the beneficiary becomes the legal owner—now personally responsible for all income, expenses, and taxes as of the date the DoD is executed. What complicated this transaction in my mind was that it's treated more like a gift transfer than an inheritance, hence no step-up in basis and my uncertainty as to how depreciation is properly allocated.
I'm trying to get my arms around this now so I can update the Schedule E workbook I prepare for the property each year, before I start plugging it all into TurboTax later this month.
