Is gross income from annuities (Box 1) included on Sch B line 8 Form 1041?

Line 8 includes any income that doesn’t fit the other categories - annuity income is one of those other categories.

Thank you. Just to make sure - non taxable income is included on line 8 Sch B Form 1041.

Only the taxable portion would be reported on line 8

Oops, I missed the schedule B part of your post, I thought you were talking about 1041 line 8.  The form says line 8 is determined by the governing instrument.  You don’t say what else you have on the return to know if putting anything on that line is really going to change anything for tax purposes.

That is trust accounting income as set forth in the trust’s governing instrument which is USUALLY ALL income the trust is entitled to (again per the terms of the trust).

“Principal, of course, is virtually always excluded from taxable income.”

What about capital gains?

Only the taxable part of the annuity distribution (Box 2a, Form 1099-R) is reported on Line 8 of Form 1041.  That should then be the same number included on Line 8 of Schedule B.  The nontaxable part of the annuity distribution, which is return of principal for purchased annuities, is also trust principal.  

This is the final year for the trust, everything is distributed, including capital gains.

Annuities are partially taxable, but the whole gross is reflected on line 8 Sch B.

What did you enter on Line 8, Page 1?  It should only be the taxable part of the annuity.  Then that amount would also appear on Line 8, Schedule B.

The line 8 on page 1 shows only the taxable portion of annuities (Box 2a Form 1099R). The line 8 of Sch B shows gross amount (Box 1 Form 1099R).  This is the final 1041.