# T3 - 104(7.01) adjustment

**URL:** https://www.protaxcommunity.com/t/t3-104-7-01-adjustment/7064
**Category:** T3
**Created:** [May 25, 2023, 3:54pm UTC](https://www.protaxcommunity.com/t/t3-104-7-01-adjustment/7064 "2023-05-25T15:54:07Z")
**Posts on this page:** 1
**Page:** 1

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### Author: ![edwin](https://avatars.discourse-cdn.com/v4/letter/e/73ab20/32.png) [@edwin](https://www.protaxcommunity.com/u/edwin)
#### Post date: [May 25, 2023, 3:54pm UTC](https://www.protaxcommunity.com/t/t3-104-7-01-adjustment/7064/1 "2023-05-25T15:54:07Z")

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104(7.01) applies to deemed resident trusts, which are not common. This subsection limits the trust’s ability to deduct allocations to beneficiaries from its taxable income. The deduction is limited to 65% or 40%, depending on the residency of the beneficiary.

Does anyone know how to activate this limitation in the software, e.g. is there a checkbox or input form? or otherwise how to do make the adjustment without an override?