Schedule DD

Schedule DD calculates the distribution deduction.
Column A is the resident column and displays all sources of income.
Column B is the nonresident column and displays PA source income only. The nonresident column calculates the distribution deduction for nonresident beneficiaries. This column may have amounts if a trust only has resident beneficiaries.

Line 1 - Total income from Line 7, PA-41

Column B, line 1 automatically includes interest and dividend income coded with postal code
PA
on the federal
Income
screen.

Line 2 - Income included in Line 1

Line 2 of Schedule DD reports capital gains and other income that's not distributable. UltraTax CS calculates the amounts on line 2. However, manual adjustments to line 2 amounts are usually needed, especially in column B, because the federal program doesn't track the corpus on an instate basis. To make adjustments, use the fields on the
PAIncome
screen.
UltraTax CS automatically includes capital gains not distributed on Schedule DD line 2a. To make adjustments to the amount on line 2a, use the
Schedule DD, line 2a – adjustment
field on the
PAIncome
screen.

Line 8 - Total required to be distributed

UltraTax CS calculates Line 8 on a taxable income basis. To override the calculated amount, use the
Total required to be distributed (Force)
field on the
PAIncome
screen. UltraTax CS calculates the line 8 amount as follows:
  • Revocable grantor trusts use the total income amount from line 1 of this schedule.
  • Make an entry in this field for irrevocable grantor trusts with a distribution to the beneficiaries.
  • Simple, complex, and pooled income fund trusts use the income calculated on the Income Allocation Worksheet.
  • Decedent estates show 0 on Schedule DD, lines 8a, 9a, and 10a. For decedent estates, you need to force line 11 and line 12 amounts on the
    PAIncome
    screen.
  • Charitable lead trusts use the amount from federal Form 5227, Page 4.
  • Charitable annuity trusts use the amount from federal Form 5227, Page 2.
  • Charitable remainder unitrusts use the amount from federal Form 5227, Page 1.
  • If the return includes nontaxable income, you need to force the line 8 amount on the
    PAIncome
    screen.

Line 15 - Deduction for distribution

The total amount allowed to be distributed to the beneficiary is the lesser of line 3a or 14a.
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