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.
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Attribute |
Simple Trust |
Complex Trust |
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Trust could incur its own tax liability for the |
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year |
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Trust generally distributes all of the DNI |
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Trust can deduct its charitable contributions |
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in the year of, or the year after, |
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payment |
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Trust could claim a foreign tax credit |
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Maximum tax rate on net long term capital |
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gains = 15% |
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AMT preferences and adjustments flow |
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through to beneficiaries ratably |
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Trust can adopt the FIFO method for its |
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inventory assets; the grantor had been |
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using lower of cost or market |
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Trust can use a tax year other than the |
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calendar year |
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Amount of personal exemption |
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