Charitable deductions are gifts that have been made by the estate or trust to qualified charitable entities. These gifts/deductions must be authorized by either the decedent's will or by the trust document and must be paid out of income of the estate or trust and not from the corpus of the trust or assets of the estate. If the Charitable Gift is paid out of the assets of the estate or the corpus of the trust, the deduction cannot be taken on the Form 1041. The trust document merely authorizes that charitable contributions can be made; it does not need to specify to whom or how they are made.
Trusts other than split-interest trusts or non-exempt charitable trusts that claim a deduction for charitable gifts must also file Form 1041-A unless the trust distributes currently to the beneficiaries all of the Distributable Net Income of the trust.
The deduction for a charitable contribution of property purchased with trust income is limited to the cost basis of the property. The appreciated fair market value cannot be deducted. (Green v. U.S., 144 F.Supp. 3d 1254 (10th Cir. 2018))