BNS Posted April 1, 2009 Report Share Posted April 1, 2009 A new client is trustee for a special needs trust that was created in 1989 for his brother who is now 67 years old. Brother lives in a group home in Southern California and receives SSI and MediCal. Prior CPA set this as a complex trust, however in some research if this is a "qualified disablity trust" the exemption is $3500 (same as on 1040) otherwise it would only be $100, which would decrease the tax liability on the 1041. I found reference to a qualified trust for someone under the age of 65. This was set up way before the "disabled" person was 65, so does it matter that he is now over 65, must use the lower exemption of $100. What would happen if the 2008 "1041" was submitted, checking the "qualified disablity trust" vs complex trust ....money is not distributed, other than if there are medical bills that state does not cover. thanks for any input ... Sue Quote Link to comment Share on other sites More sharing options...
schirallicpa Posted April 1, 2009 Report Share Posted April 1, 2009 I think you need to see the originating documents of the trust to determine whether it is complex or not. I think the deciding point is whether or not corpus may be distributed. Quote Link to comment Share on other sites More sharing options...
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