credit shelter trust accounting

[Ranger]

My questions concern a credit shelter trust. Husband died in June of 2011. 706 was recently filed and the CST was funded. Assets included investments and farm property which is leased out.

Now surviving spouse owns 1\2 of assets and the other half goes to the CST.

From what I have been told, all the income from the investments and farm will go straight to the wife. If so, then form 1041 will not be filed for the CST?

My second question is in regards to depreciation of the farm property which is now jointly owned between the surviving spouse and CST. Can the wife take the CST’s share of the depreciation directly on her return since she has life tenancy in the property?

Thanks for any thoughts you might have or references where I can research this more.

[jainen]

>>she has life tenancy in the property<<

You'll have to read the trust documents. Credit shelter refers to keeping the exclusion amount out of the survivor's taxable estate, so I won't guess why they did the life tenancy. Maybe it means this is a disregarded entity.as a grantor trust, Or it may be that income assets are in the survivor's share and the CST was funded with low-yield investments. Read the trust documents.