ATX handling of capital gains for trust

[David]

I thought all capital gains, whether LT or ST, were considered principal for a complex trust.

The ATX DNI schedule only excludes the LT capital gain from distributable income but it includes tha ST capital gain in distributable income.

Is this a correct handling or is this an ATX program problem?

Thanks.

[indyscott]

the US Master Tax Guide, par. 543 & 559 deal with Distributable Net Income. "DNI of an estate or trust generally consists of the same items of gross income and deductions that make up the taxable income of the estate or trust.. " except then goes on to list 7 exceptions.. "Capital gains allocated to corpus" is one of them. I think because the ST cap gains are ordinary income they're not excluded.

So, I'd say the program is doing the right thing.