Trusts and Reportable Income
As a general rule, income earned by an estate or trust is taxed only once, and in the same manner as it would be taxed to an individual. See IRC Section 641. However, estates and trusts may deduct charitable contributions without any limitation based on adjusted gross income, and may take exemptions that are not pro-rated for shorter tax years or phased out based on income thresholds. The exemption available to an estate is $600, while simple trusts may take a $300 exemption and complex trusts may take a $100 exemption....