I reviewed the IRS directions and for a trust that distributes all it's income, the exemption continues to be $300.
"Is this a mistake, if so, how can I correct it."
If the trust instrument requires that you, presumably as trustee, distribute all of the income currently, then the trust is entitled to a $300 exemption, regardless of whether the trust distributes additional amounts.
The problem is TurboTax assumes the trust is entitled to a $100 exemption if the trust is a complex trust and a $300 exemption if the trust is a simple trust and that is incorrect. You can, however, change the $100 exemption amount in Forms Mode by simply entering "300" in place of "100" directly on Form 1041 (see screenshot).
"Is this a mistake, if so, how can I correct it."
If the trust instrument requires that you, presumably as trustee, distribute all of the income currently, then the trust is entitled to a $300 exemption, regardless of whether the trust distributes additional amounts.
The problem is TurboTax assumes the trust is entitled to a $100 exemption if the trust is a complex trust and a $300 exemption if the trust is a simple trust and that is incorrect. You can, however, change the $100 exemption amount in Forms Mode by simply entering "300" in place of "100" directly on Form 1041 (see screenshot).
Turbo Tax also ADDS that number to income. Shouldn't an exemption be subtracted from income?
Yes, and TurboTax subtracts the exemption (along with other deductions) from Line 9, Total income.
My 1041 leaves line 20 blank. This is for an estate. Why doesn't TT give me the $600 exemption?