Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Is Bypass Trust Simple or Complex
Posted by: Geraldson, October 9, 2017 01:28PM
I am wondering if a "Bypass Trust", for the benefit of a surviving spouse, is a Simple Trust or a Complex Trust. It seems to be Simple, in that it requires distribution of all income. But because the surviving spouse can invade principal, at least to some extent, would that not require the trust to file as "Complex"?

Re: Is Bypass Trust Simple or Complex
Posted by: Drewremedy, October 10, 2017 12:11AM
MY lay understanding...a trust is a simple trust if it distributes all its income each year ...and just that .

However in any year with it also distributes corpus. ( or fails to distribute income ) it becomes a complex trust, for that year .

Re: Is Bypass Trust Simple or Complex
Posted by: triad, October 10, 2017 02:56AM
See the 1041 instructions. If the trust isn't simple, it's complex.

Note, eventually all trusts distribute corpus, so the fact that a trust *can* doesn't make it complex until it does.



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