Trust & estate income tax — EA Part 2 Widgets

What this does

How to read it Visual: flow from trust income → DNI → beneficiary vs trust.

Choose simple, complex, or grantor trust treatment and sketch DNI vs the distribution deduction — who gets taxed?

Visual: flow from trust income → DNI → beneficiary vs trust.

Trust type

Fiduciary accounting income Taxable income before distribution deduction Capital gains allocated to corpus (excluded from DNI sketch) Income required / actually distributed

Who gets taxed?

DNI vs distribution

DNI sketch

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Distribution deduction (≤ DNI)

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Taxed to

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Exam trap: Simple trusts must distribute all income currently and can’t distribute corpus or charity. Grantor trusts: owner taxed directly (often no 1041 tax). DNI caps the distribution deduction / beneficiary inclusion.

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Study tool only — not official IRS software. Figures labeled 2025 track law/forms through Dec 31, 2025. Confirm against current IRS pubs before the exam.