BINGO. OMG here's the problem. In TT it asks for second tier distributions. It fails to say that this value should ONLY be from the DNI--instead, I and others likely included ALL distributions which of course force ALL dividends and interest to go to beneficiaries. I searched the online forum and saw a post about this from a few years back. TT should change wording to indicate ONLY include distributions from the DNI (interest and dividends) NOT trust corpus. I guess the IRS doesn't really care what is distributed from the trust corpus and there's no where on the 1041 to include that, which makes sense since it is not taxable income.
