My Trust is eligible for a $100 exemption on Line 21 of Federal Form 1041. Because I didn't have capital gains and all of the interest/dividend income is being distributed, this is causing line 23 to be negative $100.
For the federal taxes, this results in $0 tax due for the trust, which I expect.
The negative $100 is then transferred to the Colorado Form DR 105, Line 1. The Colorado taxes due is also $0 for the trust.
I am curious if the exemption should transfer to the Colorado Form DR? Or should my Federal taxable income be $0?
