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Part 2 Trusts and Estates (Form 1041) question: simple trust for a tax year

Part 2Trusts and Estates (Form 1041)

A trust is a simple trust for a tax year if its terms require it to distribute all income currently and it:

A Has only one beneficiary named in the governing instrument
B Can be revoked by the grantor at any time during the tax year
C Makes no charitable gifts and distributes no corpus that year
D Has gross income of less than $600 for the trust's whole tax year

Show the answer and explanation

Answer: C. Makes no charitable gifts and distributes no corpus that year

A simple trust must distribute all of its income currently, has no provision for charitable contributions and distributes no corpus during the year. Any other trust is complex for that year. A simple trust gets a $300 exemption; a complex trust gets $100. A revocable trust is generally a grantor trust. Source: IRC 651, 661; Treas. Reg. 1.651(a)-1; Form 1041 instructions (2025). Tax year: 2025 (law as of 31 Dec 2025).

Common mistake

Classifying a trust as simple based on the number of beneficiaries.

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On Form 1041, a decedent's estate is allowed an exemption of Distributable net income (DNI) serves to A calendar-year corporation formed in 2024 wants S status starting January 1, 2025. March 15, 2025 fell on a Saturday. By what date must it have filed Form 2553 for the election to be timely?

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Original study material mapped to the public IRS SEE content outlines; not a real exam question.Not affiliated with or endorsed by the IRS or PSI. Verify figures and rules against current guidance before relying on them.