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Amount distributed is more than trust accounting income
Actual amount distributed to beneficiary is greater than the trust accounting income calculated by Turbotax. Does this mean that I should enter on the next screen the trust accounting income as tier 1 and the amount that exceeds trust accounting income as tier 2? What effect if any does this have on the amounts shown on K-1? Do the tax rules just consider this a distribution of principal?


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Amount distributed is more than trust accounting income
" Do the tax rules just consider this a distribution of principal?"
Yes. The entire distribution is second tier since you have a zero, or a negative number, on Line 17 (your trust's AGI). As such, all trust income has been offset by trust expenses (deductions) and principal is all that remains to be distributed.
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Amount distributed is more than trust accounting income
" Do the tax rules just consider this a distribution of principal?"
Yes. The entire distribution is second tier since you have a zero, or a negative number, on Line 17 (your trust's AGI). As such, all trust income has been offset by trust expenses (deductions) and principal is all that remains to be distributed.
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Amount distributed is more than trust accounting income
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Amount distributed is more than trust accounting income
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Amount distributed is more than trust accounting income
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Amount distributed is more than trust accounting income
Re that error check, I am not familiar with trust taxation in California but, with respect to federal income taxation, Schedule J is only used to report an accumulation distribution for certain trusts that were treated foreign trusts and certain trusts that were created before March 1, 1984.
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Amount distributed is more than trust accounting income
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.
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Amount distributed is more than trust accounting income
This answer is incorrect. You are mixing up income and principal. It is correctly answered here: Solved: The FAQ appears to be wrong. Distributions from the esta... (intuit.com)
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