The calculation of trust accounting income (TAI) determines how much is payable to income beneficiaries and remaindermen. It is determined by the applicable state's version of the Uniform and Principal Act, unless trumped by the trust instrument. This session will begin with an overview of trust accounting income and proceed to discuss some of the most frequently encountered issues in calculating TAI. Among the issues discussed will be how income from entities is allocated between income and principal as well as the related income taxes and how distributions from IRAs payable to a trust are allocated. In addition, the session will also point out how TAI differs from a trust's taxable income and distributable net income.