Section 645 election for revocable living trust

[jomew]

My father-in-law passed away in Feb 2023. He had a revocable living trust. We have completed his decedent return using 1040 for Jan - Feb 2023. The trust had income in Mar - Apr from a rental property. After Apr, the rental property was deeded to my husband.

I understand that in addition to filing a 1040, I'm supposed to file a 1041 for my father-in-law's estate and a 1041 for his trust. But given that the income from the estate and trust are the same - rent from the property - I am thinking that I should make a section 645 election so that I only need to file one 1041. 

Does this logic make sense? If yes, then for purposes of form 8855 do I put the name of the trust in both part 1 and part 2?

[jomew]

The rental property was held in the trust.

My father-in-law did receive 1099-INT and 1099-R (pension) but we reported that income on his final 1040-SR so for purposes of the estate's 1041, there is no income if we count the rental income as belonging to the trust.

[jomew]

Got it. I was under the impression that I needed to file the 1041 regardless of whether there was income or not. So on the 1041 for the trust, under A (entity type) I would only need to select "grantor type trust" then - although I had also read on a tax site that once the grantor is deceased the trust reverts to a non-grantor trust...in which case, none of the options under A would then apply.  Can you confirm this?

Thanks!

[jomew]

If that's the case, then I don't think any of the entity types under A on form 1041 apply then. Is it okay to leave A blank on the form or am I absolutely required to pick one of the items? 

I would have originally picked "decedent's estate" but based on the feedback above, I no longer need to file 1041 for an estate so would not check that. It is also no longer a grantor trust since the grantor is deceased. It's also not a simple trust because we never made any distributions.

[jomew]

Thanks for all your help so far. Hopefully one last question. Since the rental property was held in the trust and then subsequently inherited by/deeded over to my husband...is this considered a distribution of the trust's corpus and therefore, do I need to create a K-1 for the rental?

[jomew]

The rental property was only deeded to him in May 2023. From Mar - Apr the property generated income and we are attributing this income to the trust (his father passed away in Feb).