Can trust take over the capital loss carried over

Jul 30, 2014
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My father died in March 2013. We created a family trust, I am the trustee and my mother is the beneficiary.

We transferred my father's portfolio to trust in July 2013. The trust had capital gain of 15K total. However, my father had a long term capital loss of more than $100k unused. My questions are:

1. can I report trust capital gain under my father's final income tax in 2013?
2. Or can I carry my father's capital loss and apply to the trust so I deduct future capital gain?
3. If I allocate all gain to my mother and report on her K1. Not sure how this works. If so I have to file (late) trust income tax before completing my parents' 1040 tax return (w/ extension)? And do I need to issue some kind of 1099 income from trust to my mother?

Thanks so much for any advises.



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May 12, 2011
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United States
At time of your father's death, the tax value of the portfolio goes to his estate (unless there was already a trust and trust was set up to hold portfolio at his passing but it sound like trust was created later). The estate records the portfolio at fair market value at the time of his passing. So be sure that was done (or gets done) - it might lower the 15K gain.

Typically, once an individual dies the NOL's can be used on their final return and then any unused NOLS expire and so cannot be used by the trust or estate. That is why tax planning is needed beforehand.

And in any case this stuff is so complex that you should get a local qualified tax person to help you on this.
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