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Question

Are gains and losses always considered corpus?

Answer

Normally, all capital gains not distributed to beneficiaries, including long-term capital gain distributions from mutual funds, are considered corpus. The 100% of capital gains includible in DNI per trust document, Short-term capital gain includible in DNI if not 100% (Force), Section 1231 gain includible in DNI if not 100% (Force), and Other long-term capital gain includible in DNI if not 100% (Force) fields on Screen Dist in the Allocation folder can be used to mark all or part of capital gains as income rather than corpus. This information is used in the calculation of Schedule B, line 3, as well as in the calculation of accounting income.

Use the Allocate ordinary gain / loss from Form 4797 to income field on Screen Dist in the Allocation folder to allocate ordinary gains and losses from Form 4797 to income. These amounts automatically default to corpus.

Related topic: 1041-US: Accounting income and corpus FAQs

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