Summit CPA Review
TCP Trust Taxation · Updated November 2026

Fiduciary Accounting Income vs DNI: Why Are They Not the Same Number?

Fiduciary accounting income is based on trust-accounting rules; DNI is a federal income-tax concept.

Fiduciary accounting income

FAI generally determines what is treated as trust income versus principal under the governing instrument and trust law.

Distributable net income

DNI is a federal tax concept used to limit and characterize income carried out to beneficiaries.

Why the numbers differ

Tax-exempt income, capital gains, deductions, and trust-accounting classifications can cause FAI and DNI to diverge.

Exam strategy

Identify whether the question is asking about trust-accounting distribution rights or federal tax consequences.

The takeaway

FAI governs trust-accounting income concepts; DNI governs the federal tax ceiling and character of income carried out to beneficiaries.

Related Summit resources

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FAQ

Are FAI and DNI always equal?

No.

Is DNI a federal tax concept?

Yes.

Can trust-accounting classifications differ from tax classifications?

Yes.