A complex trust can claim a Year 1 deduction for a gift to charity, where the contribution was made on October 20 of Year 2 out of gross income recognized in Year 1.

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According to IRS rules, a complex trust is allowed to deduct a charitable contribution made in a tax year if it is paid before the tax year's end or by the extended due date of the trust's tax return. In this case, the contribution was made on October 20 of Year 2, but the trust can still claim a deduction in Year 1 because it was made out of gross income recognized in Year 1.

A Complex Trust Can Claim a Year 1 Deduction for a Gift