Since investment management fees are no longer deductible on the trust 1041, I am finding that the distributable net income is greater than the accounting income due to 1/2 of the fees being charged to accounting income. This is causing income to be taxed at the trust level.  Your thoughts?

Are the total state taxes which are attributable to investment income deductible when calculating NII rather than the $10,000 that is allowed for the deduction on page 1?