"How do I determine the capital gains attributable to income"
Capital gain usually remains with the trust and the trust pays the applicable income tax, if any, on the gain.
However, some trust instruments mandate that the trustee allocate capital gain to income and distribute same to the beneficiary(ies), some trusts give the trustee discretion to treat capital gain as income and distribute it, some expressly prohibit the trustee from distributing capital gain, and some are completely silent on the issue.
Therefore, you have to refer to the trust instrument, itself, and applicable local law to determine whether or not you can treat capital gain as income and distribute the gain to the beneficiary(ies).
