Oregon State Trust Income Tax OR-41: deducting federal income tax paid

[ts777]

I'm filing an OR-41 for a simple trust that is administered in Oregon. All income is distributed to a beneficiary, while capital gains remain with the trust, and the trust will pay Federal and Oregon tax on the capital gains.

I cannot understand why the way I am completing OR-41 results in the federal income tax subtraction (which is the amount of federal income tax the trust has paid for capital gains) does not reduce the trusts taxable income in Oregon.  Because all income is distributed I end up with 100% in line 3. This results in calculations in lines 5a and 5b assigning all of the fiduciary's adjustment to the beneficiary and none to the trust,  which results in no reduction in Oregon taxable income.

Shouldn't the trust's federal income tax paid (from capital gains), reduce the trust's tax liability for Oregon (on those same capital gains)? Thanks for any help you can provide.