Discussion:Simple Trust Tax Return

I am going to try to prepare my first trust tax return. My tax client has informed me her mother has set up a trust and she is one of the three beneficiaries and they would like me to prepare it. I may have to partner with another preparer to get this done.

I have reviewed the income from the trust and it is dividend and interest income.

Here are my questions:

1) I know if this is a simple trust return that all income should be distributed to the beneficiaries and shown on the K-1. Does the money actually have to be distributed or can it still stay in the trust bank or brokerage account.

2) Do I have to find out from the lawyer what type of trust it is or by the transactions that happened during the year derive what type of return it is.

3) If it is a simple trust return, are there any things I should be aware of during the preparation.

Please advise.

Thanks,

Bj