The determination can be made each year whether or not to deduct the QBI deduction. ... View more

The Forms 8453 and 8949 are federal forms, not CA state forms.   Since the actual Forms 8453, 8949 and 1099-B were not part of the actual federal return filed, but instead were supporting documentation sent to IRS after the federal return was accepted, you should not mail it to the CA FTB unless they request them at a later date. ... View more

@NightTreader @susanstrausser21   I am sorry for your loss.   You would still file a 1041 for the revocable living trust or an irrevocable trust. You would mark the type of entity at the top of the 1041 return.   Generally, while the taxpayer is alive, the trust is revocable and everything still falls under their control.     You are correct, once the grantor of the revocable living trust passes away, then the trust automatically turns into an irrevocable trust and must get its own ein and file its own return.   If the house was the principal residence of the decedent prior to death, then it is considered a personal asset and if sold at a loss, the personal loss is not deductible.  A gain on the sale is taxable.   If mortgage interest is paid after the death of the decedent by the trust, then the trust would deduct that mortgage interest paid on line 10 of the 1041:   Per instructions for Form 1041: Types of interest to include on line 10 are: Any investment interest (subject to limitations—see below); Any qualified residence interest (see later);etc. For additional information, refer to the following link: Qualified Principal Residence Interest Expense line 10 form 1041   ... View more