Trust Return

[S T]

I am closing out a Trust Return under Sect 645 election fiscal year and closing out as of 12/31/2012

Question - I have an $ 8,000 capital loss carryover (generated by stock loss) - which now can be allocated to Beneficiary K-1 forms on Termination for the pass thru

the 1041 for this period 6/1/12012 - 12/31/2012 - marked terminated/final as of 12/31/2012, does move all to the Beneficiary K-1 Forms Box 11 with a Code B and the proper amount

However, the Form 1041 page 1 - Line 4 is still showing (3,000) capital loss -
Would that be correct?? or what do I need to do to remove??? from the Form 1041 Page 1

This is a final return and closing!

Good Grief - this one has given me some issues!

Thanks

Sandy

[Snaggletooth]

My wonderful explanation

Actually, if it's not that wonderful it will be "business as usual" for me, so please satisfy yourself that I am correct...

The software cannot calculate more than a $3000 loss because it is calculating taxable income to the trust. Had there been no distribution, this is all the trust could deduct.

However, the individual returns are entitled to the entire accumulated $8000 via the K-1. The individuals may have other capital gains and even if not, they need to embrace the entire $8000 - if they don't the software will not know to carryover $5000 into 2013.

Can't leave $5K in carryforwards to 2013 if there's not going to be a 2013. Appears the rules are different than if someone dies with a carryforward and never gets to use it...(that's another discussion and it sucks if there can be IRD then there should also be LRD - loss in respect of a decedent).

[S T]

Thanks Snags,

New Software - so more on my plate then just the tax issues - just didn't look right

all carrying to the Final K-1 to beneficiaries and NOW I have NO loss carryforward 2013 with the 1041 - just the $ 3,000 loss on Line 4 of 1041 page 1 - which i was having an issue with - did not expect that to show on termination and final

Just seems odd that the 1041 does that - has no impact for filing as the Trust is at loss and all being carried to Beneificiary K-1 on "final"

Just needed the reassurance it was being handled correctly - so I can move this "gremlin" out of here!

Sandy

[Burke]

Good. It is working correctly. The $3K loss does show up on Page 1, but if there was no income for it to offset, then the bene's get the full loss on final year termination.

[S T]

Thanks Burke,
The confirmation makes me feel more at ease - just was strange looking to me on reviewing the 1041 forms.

Yes all expense items and st c/l carryover are showing on the "final K-1" forms.

I can finally see daylight - and finalize this "return" and have this Trustee go away!

Sandy