Business & farm

Capital gain is typically allocated to corpus by many trust instruments and local law (i.e., the Uniform Principal and Income Act).

If the trust instrument specifically states capital gain is allocated to income, or provides that the fiduciary has the discretion to allocate capital gain to income and the fiduciary does so and distributes the gain as a matter of course to the beneficiary(ies), then the gain simply needs to be "allocated to income" in TurboTax.