"It looks like the assets should be distributed to shareholders on the final return in year 2121. Then the assets should be depreciated on a new basis on 1040 schedule E in next year."

You only used the word "assets" and did not clarify if you still are referring to the same real estate. If so, then no, that's not what you would be doing.

As you pointed out, real estate that was put into a family trust two years ago means it has nothing to do with the closing of any S corp now. And no, the family trust isn't filing a 1040.

I don't know how new you are to all of this, but you might want to get some mentoring until you get some experience on these more complex issues. Having a local resource to work with will really help, because no one on the internet can review paperwork or details with you.