EST2520. The Calculation and Importance of Trust Accounting Income (TAI) Including Flow-Through Entities

This session will discuss what trust accounting income (TAI) is, what rules govern TAI, and how to calculate TAI. The session will review the provisions of the Uniform Principal and Income Act as drafted by the Uniform Law Commission and how this affects the calculation of an estate or trust’s distributable net income and the amount that will be taxed to the trust and the beneficiaries. To understand TAI, the session will include a case study, which will illustrate the operation of the Uniform Principal and Income Act and how it affects who gets what when distributions are made from an estate or trust.

Learning Objectives:

• Identify what trust accounting income (TAI) is and why it is important in the administration of an estate or trust.
• Analyze the Uniform Principal and Income Act and its relevance in calculating trust accounting income.
• Distinguish between items that are allocated to trust accounting income and items that are allocated to trust corpus or principal.