trust

[joe5050]

how do you determine if a distribution from a trust is tier 1 or tier 2. The trust in question is a complex trust that does not require yearly distributions.

thank you.

[Anonymous_ · Accepted solution]

Tier 2 distributions would be all amounts paid to beneficiaries other than Tier 1 distributions.

Tier 1 distributions are mandatory (they are required to be paid) and not discretionary.

Ref Section 662(a)(1)

[Anonymous_]

If no distributions are required, then any that are actually made would generally be Tier 2.