However, the "zeroed out" result is at the expense of the beneficiary in the sense that the beneficiary receives a distribution that is $3,000 less.
Yes that is true in that tax year. But the bene could get that back in the next tax year (again if the trust instrument grants the trustee sufficient discretion). This could be a don't distribute in December but do distribute in January kind of thing. And of course these are very small numbers and likely an over optimization. However the OP wanted to understand the basic concepts and options.
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