Are distributions from a Rabbi Trust taxable?

Yes the distributions from a Rabbi Trust are clearly taxable. The trust is funded with pretax dollars and investment returns compound tax-deferred until distributed, generally at the time of an employee's retirement or termination. This is much like a 401K or other qualified plan. A rabbi trust is not a qualified plan, assets held in the trust are not current assets of the employee/beneficiary and are subject to loss or forfeiture if the employer becomes insolvent/bankrupt, in which case those assets are subject to the claims of the employers general creditors. This is the key difference as compared to qualified plans such as a 401K. The benefit is tax deferral, not tax avoidance. The risk is employer bankruptcy before payout.