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Old 02-19-2020, 09:36 AM
Tom Tildrum is offline
Charter Member
Join Date: Apr 2002
Location: Falls Church, Va.
Posts: 14,084
I do a relatively uncomplicated Form 1041 every year. I get the sense that even the IRS deals with trust taxation issues rarely.

My read of Line 23: Ordinarily, if the trust's overall net income is a loss, it could typically carry at least some of that loss into the next year and apply it to reduce its income then. If the trust is shutting down, though, and will not file a return next year, those losses can be distributed to the beneficiaries, similar to an asset of the trust. The beneficiaries might be able to deduct some or all of that loss from their own tax returns, depending on their personal tax situations. I do not know what forms need to be filled out to record such a transfer.

Please note that I am not a tax lawyer, nor am I your lawyer, and I may be wrong.