Trust Distributions

[GodFather]

Single client contacted me concerning her deceased mother's trust.  I do not prepare estate returns and have little experience with trusts.  Hoping you guys can provide some counsel.  Client indicated her mother recently passed away and the trustee of the mothers trust, Bank of America, is not handling the responsibilities so she is becoming the trustee.  She may be a successor trustee, if that matters.   

She indicated her and her sister will receive yearly distributions from the trust in the amount of $10,000 each.  It's my understanding those distributions earnings are taxable to the beneficiaries, but not the principal.  Client indicated those are the only funds she and her sister will receive, the rest of the trust distributions will be made to charities.  

Is my understanding correct?  My client will receive a K-1 showing her share of the distributions which should reflect only earnings as taxable?  Appreciate any insights. 

Thank you. 

[IRonMaN]

You are on the right track.  Distributions of income is taxable, distributions of corpus is not.

[GodFather]

Thank you, Sir. 

[IRonMaN]

You betcha!

[Just-Lisa-Now-]

It will depend on WHAT that money was from.

If those distributions are from a retirement account that named the trust as the beneficiary, the entire amount may be taxable to the trusts beneficiaries.