One thing I learned for a complex trust tax return I was analyzing yesterday is that the ordinary income is taxed first using the trust brackets for ordinary income. Then, to the degree the 3,250 is not "used up" in ordinary income, the preferential income is taxed at zero (up to 3,250), then 15%, etc. (using the preferential complex trust tax brackets). This took me 2 calls with Intuit ProConnect, 1 call with the IRS, then figuring it out myself. I also learned yesterday that there are no longer any tax professionals at the IRS preparer phone line!