New client with an irrevocable trust. I received last years tax and accounting package, and was going through the documents and came across a letter that states the following:
"Your share of 2019 income to be distributed from the trust is $YYY.
As you had a carry forward excess distribution of $XXXX from 2018, and a carry forward excess distribution of $ZZZZ at the end of 2019, there is no income to distribute to you this year"
The formula is XXXX - ZZZZ = YYY
I have never seen this before, and a quick search doesn't turn anything up. I know carry forward excess distributions are a thing for non-profit private foundations, but I have never seen it for a trust before.
Am I missing something, or is this correct?