Difference between accounting income and distributable net income
The following items cause the majority of the differences between accounting income (AI) and distributable net income (DNI).
Item | Accounting income | Distributable net income |
|---|---|---|
Income and deductions allocated to corpus | Income and deductions are excluded from accounting. | Includes income and deductions. |
Passive loss | Includes entire loss. | Includes loss determined on Form 8582. |
Miscellaneous deductions | Includes entire deduction. | Deductions aren't allowed. |
Taxes | Includes entire deduction. | The deduction is limited to $10,000. |
Screen 1099-R | Includes gross distribution. | Includes taxable income. |
Pass-through activities | Includes actual cash or property distributions received (entered on the K1-3 window).
note
To include the income or losses reported on Schedule K-1 in accounting income, don't enter distributions received. Go to the Dist screen in the Allocation folder. Enter X in the Include income reported instead of distributions in accounting income field. | Includes income and deductions reported on Schedule K-1. |
