Taxation of Estates and Gifts

Fiduciary Accounting Income

Fiduciary account income is largely determined by state law, but it includes both tax-exempt and normal income (including interest) and excludes capital gains and losses. 26 U.S.C. § 643(b).

• Capital gains and losses are just allocated as an increase in principal, not as actual income. UPIA § 404.
  • Some other expenses may be treated like this too, and some are half included. UPIA § 502.