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DimitriConstantine

Question

Trust distributions to beneficiary

Forum|Forum|1 year ago
March 16, 2025
1 reply
0 views

For a Complex trust where there are no required distributions, but a distribution was made, can all of that distribution be classified as corpus/principal and leave the trust to pay taxes on any income? I ask because there is a carryover loss from last year and I'd like to use that up rather than having the beneficiary pay unnecessarily.

No. For a complex trust, distributions of principal cannot be made unless all income for the year has been distributed. Ordinary income is distributed first, ahead of dividends, and dividends have to be distributed before capital gains.

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DimitriConstantineAuthor

If that's so, then when would capital loss carryovers ever get used by the trust?

An answer would have been nice. I am putting in here so I hear if there is one. Sorry.