Question

Attribute	Simple	Complex
Trust could incur its own tax liability for the year.	S1	C1
Trust generally distributes all of the DNI.	S2	C2
Trust can deduct its charitable contributions in the year of or the year after payment.	S3	C3
Trust could claim a foreign tax credit.	S4	C4
Maximum tax rate on LTCG = 20%.	S5	C5

Using the table above, make a post that uses specific examples for each trust type. (Each letter-number combination represents a trust type for this discussion.)

Answer 1

A simple trust is trust that must distributes all its income currently, cannot accumulate income, cannot distributes out of corpus or pay money for charitable purposes and the complex trust is the trust which not the simple trust.

Trust could incure own tax liability for the year - C1, S1(conditionally)

Trust generally distributes all of the DNI - S2

Trust can deduct its charitable contribution in the year of or the year of the after payment - C3

Trust could claim a foreign tax credit - C4

Maximum tax rate on LTCG= 20% - S5 and C5 both