I am doing my deceased sister's trust return (1041) for the second year. All the assets of the deceased are in an irrevocable trust after her death (it was revocable trust before her death). She has a “Pour Over” will. There is no separate asset in the estate. Do I need to file Form 8855 to make the election of combining estate with the trust? If yes I didn't do it last year. Can I just do it this year? I have couple of other questions:

1) The deceased's residence was kept as an investment property and was sold in 2013. However there was an additional property tax for transferring the title to the trust. Since the capital loss was already calculated in 2013 through schedule D, where should I show this additional tax in 2013 on form 1041?
2) There was some collection in 2013 related to the deceased's business form one of the clients. Should I show this on schedule C in 2013 on form 1041? The trust and estate are combined for 1041 purposes.
3) There were legal fees paid to an attorney because one of the beneficiaries pursed for litigation. Is the fee paid to the attorney deductible on form 1041?
4) Are state taxes (CA income tax) paid for the deceased for the final tax year deductible on form 1041? I know that federal income taxes are not.
5) Can the net operating loss (if not utilized in 2014) be carried forward toward until the end of the trust and be passed through to the beneficiaries the same way as capital losses?

Most assets have been distributed o the beneficiaries and just some cash has been left in the trust account.

I really appreciate any assistance that I can get. : confused: