LSTAX
Level 4

I don't think the election was made.  The living trust document states that unless terminated earlier, the trust terminates 21 years after the death of the last survivor.  Should the CPA have filed the 1041 as a Decedent's Estate type or rather as type Simple or Complex depending on distribution requirements?

Just as a simple example, what should happen here:

Taxpayer is alive and has a grantor/living revocable trust.  All income is reported on her 1040.  She dies, trustee obtains a tax id.  First year a 1041 tax return is filed after death, home is sold, there are income generating assets in accounts now titled to the trust with the trust id on forms 1099 and a 1099-S.  You go to fill out the first form 1041 for the trust.  The intention is to keep the trust open while assets are distributed to beneficiaries. What box should be checked for type?  

Thank you!

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