Isn't the $27K in box 5, not box 6? I don't know that it's possible to distribute NUA from an annuity. A distribution of NUA implies an in-kind distribution of employer securities from a qualified retirement plan. Also, the numbers don't seem to add up. Box 1 should equal the sum of the other two boxes, it seems to me.
Yes, the $25k from box 2a is the Distributable Net Income and will be passed through on Schedules K-1 to the beneficiaries in proportion to each beneficiary's share of the estate. However, presumably the entire amount of the distribution is being distributed to the beneficiaries, not just the DNI (first tier distributions), so the box 1 amount less the box 2a amount will appear on Schedule B (Form 1041) line 10 (second tier distributions).
