My question is whether, under the circumstances described below, the trust whose tax return I’m preparing (for 2016) is simple or complex. The trust was established by my mother. My sister and I are co-successor trustees and the only beneficiaries. The trust document provides that upon my mother’s death, the trustee shall pay any taxes or other expenses. It goes on to say that the remaining assets be distributed into equal shares between my sister and me. The trust document does not specify that that all of the assets be distributed immediately. The trust has no further sources of income.
The trust’s assets included stock, a home, and two IRAs. After my mother’s passing, my sister and I divided the stock equally between us. We sold the home and split the proceeds between us equally. We cashed in the IRAs and kept some money in an account to cover expenses, but have split the remainder. My question is whether the trust is simple or complex. Also, can you tell me whether this designation makes any significant difference in the trust’s ultimate tax liability?
