Level 3

How so?  (And I do not mean to sound like a wise guy; just trying to save the Trust taxes).

Capital Gains and DNI: Capital Gains are normally taxed to the estate or trust because they are  usually not included in DNI unless they are paid, credited, or required to be distributed to any beneficiary during the taxable year (including charitable beneficiaries).  If the instrument is silent with regard to capital gains, capital gains are allocated to corpus (exclude from DNI); Correct?

Capital gains allocated to corpus are included in DNI if they are either paid,credited, or required to be distributed to a beneficiary during the year, or paid, permanently set aside, or to be used for a charitable purpose; correct?

In certain situations it is easily ascertained whether capital gains are paid to a beneficiary. For example, if the trust instrument provides that the proceeds from the sale of a certain asset are to be paid to a beneficiary upon sale, then any capital gain recognized upon the sale of that asset is paid to the beneficiary and is includable in DNI.   Correct?

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