Thank you for your reply.

I had overlooked the required allocation of qualified dividends on Line 2b of the 1041 between the beneficiary and the trust. With this trust's combo of high cap gains and qual divs, any amount of distributions produces a nasty tax bite.

Lacerte's phone support was able to help - sort of. While we discussed different solutions over half an hour, I also opened a competitor's website and found the answer in their help screens.