When a trust distributes an in-kind asset with a realized loss, this loss most likely cannot be immediately deducted by the first-tier beneficiary.

Question

Quizplus · Accepted Answer

In-kind distributions of assets with a realized loss from a trust to a beneficiary typically do not allow the beneficiary to immediately deduct the loss. The loss is often realized and deductible only when the beneficiary subsequently disposes of the asset.

When a Trust Distributes an In-Kind Asset with a Realized