What is the trust's tax basis upon funding?

Yes, even with an irrevocable trust it should work that way.

One thing about gifts to irrevocable trusts though (assuming they are not otherwise considered grantor trusts): they don't qualify for the $15,000 gift tax exemption. So even though no gift tax may actually be owed, a gift tax will need to be filed no matter how small the gift is.

The trust's basis is the donor's basis if there is a gain; and FMV is there is a loss. Is that determination made at time of gift to the irrevocable trust? Or when the trust sells the item. e.g. if I transfer a security with a cost basis of $100 and the FMV is $110 at time of gift. A few months later, the trust sells it for $90.

I assume the trust's basis is $100 and have a $10 loss upon sale? Otherwise, the donee will never have a loss on properties received as a gift.

And for gift/estate tax exemption purpose, it used up $110? -- assuming this is in addition to the annual exemption).

I haven't researched this specific point, but it should be based on the date the gift is "complete."

That sounds right.

In that example it didn't use up any of the annual exemption because gifts to an irrevocable trust (no matter how small) are normally not exempt, and must be reported on a Form 709.