A complex trust is any trust other than a simple trust. A complex trust can also distribute income (some or all) to its beneficiaries and that is dependent upon the terms of the trust. A complex trust is NOT required, by IRS rule or regulation, to retain some of its income.
Ref Section 651
Note also that trusts that are required to distribute all of their income currently are allowed a deduction of $300 while all others are allowed a deduction of $100.
Ref Section 642
Regardless, you are correct in the sense that a trust can be a simple trust in one tax year and complex in another.
