final trust tax return

[Steve11349]

Can excess passive losses be passed to beneficiaries?

[Rapid Robert]

Can excess passive losses be passed to beneficiaries?

Welcome to the forum. Since I don't do very many trust returns, let me start by asking what may be a dumb question back at you --aren't suspended passive losses available when the asset that generated them is disposed? Since it's a final trust return, why are there any "excess" passive losses?

[TAXNJ]

Can excess passive losses be passed to beneficiaries?

See TTB page 7-10 and other TTB sections for information and examples that may apply to your scenario.


TTB page 7-10:
....Death. If a passive activity interest transfers because the owner dies, unused passive activity losses are allowed as a deduction on the decedent’s final tax return to the extent they exceed the beneficiary’s stepped-up basis in the passive activity.....

[Burke]

Welcome to the forum. Since I don't do very many trust returns, let me start by asking what may be a dumb question back at you --aren't suspended passive losses available when the asset that generated them is disposed? Since it's a final trust return, why are there any "excess" passive losses?

Also, they are available to be used if the asset is sold by the trust. It is not clear from the OP whether that happened, or if property ownership simply passed from the trust to the beneficiaries intact.