Thank-you for your assistance.
Yes, the trust is a Qualified Disability Trust, so it has the higher exemption. But that is for the income that stays in the Trust.
The disbursed income flows to the child, hence the question. The income is taxed to him (and since he is a dependent, taxed to the parents). It seems to make sense that if the income is used for medical expenses, it can be deducted as such by the taxpayer (in this case, the parent). I find zero information in the IRS instructions regarding this in particular.
You are correct - I should seek the advice of a professional! I have occasionally over the years, but they generally say I am doing fine with Turbotax and don't really need to spend the extra money to have them assist.
