can a testamentary trust be a qualified revocable trust?

If you are asking whether a revocable trust (living trust/grantor trust) that would become irrevocable upon the death of the grantor is a "qualified revocable trust" for purposes of Section 645, the answer is yes. The whole idea is that the executor (if any) and the trustee can elect to treat a "qualified revocable trust" as part of the decedent's estate for Federal income tax purposes. The election must be made by BOTH the estate executor (if any) and the trustee of the revocable trust not later than the time required for filing (including any extensions) the income tax return of the estate for its first tax year. There's a revenue procedure on how to make the election.

elections. A qualified revocable

Thanks Alan. I read the code over and over. I had to ignore the dictionary definition of revocable in order to see how a testamentary trust could be revocable. (By changing the will!)

The remaining problem is that the estate has been filing 1041s when all the assets are owned by the trust.

Gary

elections. A qualified revocable

I'm not sure where you are going with this. But, an irrevocable trust that is created by one's will (testamentary trust) is not a QRT and can not be revoked after death. The terms in a will that create a testamentary trust can be modified while the individual is alive. However, this is not the same as treating a QRT as part of one's estate for tax purposes. Also note, that one needs to check state law to see whether a fiduciary return has to be filed when a change in a will modifies the terms of a trust.

An estate can not file a 1041 and include income from assets that the estate does not own. An estate can file a 1041 and include income from assets of a QRT as long as the Form 8855 was filed on a timely basis.