I'm trustee of a trust that has a 3% unitrust required distribution. It usually exceeds accounting income and DNI. From your previous response, the amount of accounting income would be tier 1 and the excess would be tier 2 even though it is not discretionary. One response above was that you didn't have to enter a tier 2 amount because it wouldn't matter. If I don't enter the excess distribution in tier 2, then Box 12 on the K-1 does not have a number in it. But if I do enter a tier 2 amount then there is an AMT Adjustment in Box 12. Since the amount greater than accounting income would seem to be a distribution of principal, it doesn't seem that there should be anything in Box 12. So I'm wondering if I should put anything in tier 2.
