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A Complex Trust (Not Required to Distribute Any Income) Generated

Question 26

Multiple Choice

A complex trust (not required to distribute any income) generated a long- term capital loss of $100,000 in 2012. It had taxable income of $100,000 from domestic dividends in 2012. The trust terminated in 2012. What is the tax treatment of the capital loss to the remainderman beneficiary (who has no capital gains in 2012) ?


A) Deduction of $100,000
B) Deduction of $3,000 and no carryover
C) Deduction of $3,000 and carryover of $97,000
D) Deduction of $6,000 and carryover of $94,000

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