For the simple trust, adjusted total income is a loss of $2,586. No DNI.

For the scholarship trust, the trust was created by a will. The trust is managed by the trust department at a bank. The trust document specifies that the annual income is used to first cover expenses then provide for educational scholarships until DNI is used up. So long as the income covers expenses (given the size of corpus it always will) the trust should be perpetual. Payments are made to and educational institution FBO the recipient. We have always recorded the scholarships as an Other Expense and listed the scholarship recipients.