Ordinarily, a foreign partnership, Foreign simple trust, or foreign grantor trust is looked through for chapter 3 and chapter 61 purposes.
Under prior law, if a partner/benefi-ciary of a WP/WT was itself a foreign partnership, foreign simple trust, or foreign grantor trust and the second-tier entity did not itself elect to be a WP/ WT, a WP/WT could not assume these primary chapter 3 and chapter 61 responsibilities with respect to the second-tier entity and its partners/beneficiaries.
Simple Trusts Are Not Simple When They Have Nonresident Alien Beneficiaries
Part I of this article analyzes other aspects of simple trusts for foreign beneficiaries.
10) Of the Tax Year 2002 returns filed for complex and simple trusts
is required to distribute distributable net income to a foreign beneficiary but does not do so in the current tax year, it must withhold tax on the beneficiary's allocable share at the time the income is required to be reported on Form 1042-S (without extension) under Regs.
While many of these 2005 gifts were given directly, donors also used simple trusts
, insurance trusts, split-interest trusts, and 529-trusts.
Complex trusts were second only to simple trusts
in the aggregate value of income distribution deductions.
The proposed changes will affect any trust that relies on income to determine amounts properly payable to its beneficiaries and is subject to a power to adjust or unitrust amount under state law or its governing document; this includes simple trusts
, complex trusts that measure distributions relative to trust income, QTIP trusts, CRUTs, pooled income funds and trusts grandfathered from generation-skipping transfer (GST) taxes.
A total of 692,144 returns was filed for simple trusts
(see Figure E).
And, like simple trusts
, the beneficiaries of complex trusts and estates include in their gross income the amounts distributed or distributable to them by the trust for the tax year(s) ending with or within the beneficiary's tax year.
Example 22: A simple trust
created in 1980 received $100,000 of dividend income during its year ended 12/31/9X.