Income Taxation of Trusts and Estates

Free CFP Exam lesson in Tax Planning. 15 min read, ~2,297 words.

Simple trust: distribute all income, no corpus, no charitable. Anything else is complex, and classification is determined year by year. DNI = trust gross income - capital gains to corpus - deductible expenses + net tax-exempt interest. It caps both the distribution deduction and beneficiary taxation. When distributions exceed DNI...