A fiduciary's distribution deduction shifts the tax burden for the distributed amount of current-year income from the entity to the beneficiary.

Question

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A fiduciary's distribution deduction allows the entity (such as a trust or estate) to deduct the income it distributes to beneficiaries. This means the income is taxed at the beneficiary's level rather than at the entity's level, effectively shifting the tax burden for that income from the entity to the beneficiary.

A Fiduciary's Distribution Deduction Shifts the Tax Burden for the Distributed