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The IRS MeF system is now processing returns, and the filing deadline has been extended to 11:59 PM on Wednesday, April 18, 2018. For the latest details, see UltraTax CS alerts and notices.
Question
What causes a difference between accounting income (AI) and distributable net income (DNI)?
Answer
The following items cause the majority of the differences between accounting income (AI) and distributable net income (DNI).
| Item | Accounting income | Distributable net income |
|---|---|---|
| Income and deductions allocated to corpus | Income and deductions are excluded from accounting | Income and deductions are included |
| Passive loss | Entire loss is included | Loss determined on Form 8582 is included |
| Miscellaneous deductions | Entire deduction is included | Deduction less two percent of adjusted gross income is included |
| Screen 1099R | Gross distribution is included | Taxable income is included |
| Pass-through activities |
Actual cash or property distributions received is included (entered on Screen K1-3) Note: To include the income or losses reported on the schedule K-1 in accounting income instead of distributions received, enter X in the Include income reported instead of distributions in accounting income field in Screen Dist in the Allocation folder. |
Income and deductions reported on Schedule K-1 are included |
Related topic: 1041-US: Accounting and corpus income FAQs