A trust was originally written as a complex trust since trustee had discretion to distribute income and principal or add it back into the trust corpus. As a result of litigation, trustee is now required by a settlement agreement to distribute 3% of trust value each year. This means all of the income and principal (if interest does not cover the 3% payout) will be distributed. Does the trust take a $100 or $300 exemption on the 1041?
