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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Capital Gains and Losses
Satisfied Customers: 1561
Experience:  Over 22 years of tax preparation experience.
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Can you transfer a long term capital loss carryover that was

Customer Question

can you transfer a long term capital loss carryover that was generated in a revocable trust when the grantor (trustee) dies to their final fiduciary return and then distribute to the beneficiaries? Final 1040 for decedent and they had an extra capital loss
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  Arthur Rubin replied 1 year ago.
It's complicated. If the loss was hen generated when the grantor was alive, it flows to his return, and is lost on his death.If the loss was generated after the grantor's death, it belongs to the trust or the estate; excess capital losses flow to the beneficiaries in the last year of the estate or trust. It appears, from what you wrote, that the losses occured before death, so there is no help. But, if I misread your question, there is still some hope.
Customer: replied 1 year ago.
Even with a grantor trust (revocable when trustee is alive) would those follow to the final trust return?
Expert:  Arthur Rubin replied 1 year ago.
A grantor trust doesn't file a return of its own; all the income and loss flows to the "grantor"s return. (I put "grantor" in quotes, because, in some cases, it's not the grantor, but a beneficiary, who gets the tax attributes.) Once the grantor dies, it becomes an ordinary trust, and starts filing returns. But I think you said that the loss was generated before the grantor died.

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