Complete the following chart, indicating the comparative attributes of the typical simple trust and complex trust by answering yes/no or explaining the differences between the entities where appropriate.
Attribute |
Simple Trust |
Complex Trust |
Trust could incur its own tax liability for the |
|
|
year |
|
|
Trust generally distributes all of the DNI |
|
|
Trust can deduct its charitable contributions |
|
|
in the year of, or the year after, |
|
|
payment |
|
|
Trust could claim a foreign tax credit |
|
|
Maximum tax rate on net long term capital |
|
|
gains = 15% |
|
|
AMT preferences and adjustments flow |
|
|
through to beneficiaries ratably |
|
|
Trust can adopt the FIFO method for its |
|
|
inventory assets; the grantor had been |
|
|
using lower of cost or market |
|
|
Trust can use a tax year other than the |
|
|
calendar year |
|
|
Amount of personal exemption |
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|