Regarding the form 1040, I've found the IRS will eventually come around and agree - lawful money income is not federal income and thus nontaxable. The trust law stuff is helpful, thank you Michael.
You are welcome. The trust stuff is what matters most. The reason they agree is because the property has not been transferred, granted or bargained for to a grantee/trustee.
The blessing is in the hand of the doer. Faith absent deeds is dead.