When the grantor of a grantor (living) trust dies, the trust becomes irrevocable. This means that any income earned by the trust after the date of death is reported by the trust on Form 1041. Likely the trust will need to obtain an employer identification number (EIN) but the grantor trust probably was using the grantor’s Social Security number.
The tax on the investment income in excess of $1,700 (may change after 2007) of a child under age 18, based on the parents’ marginal tax rate and computed on Form 8615.