This area is covered by Section 643 of the Regulations.
In short, typically, capital gains are not considered "income" for the trust (as are interest and dividends, for example), but remain with the trust and are not distributed.
However, if the governing instrument and state law allow (or the terms of the trust give the discretion to do so), capital gains can be treated as income and distributed to the beneficiaries.
The yield is simply this:
If you are allowed to treat the capital gains accruing to the trust as income that can then be distributed to the beneficiaries, you need to make that selection in the program. First, you need to allocate the gains to the beneficiaries and then you need to allocate the gains to income (finally, of course, you need to make the distribution in the program.
