- quote -

You are absolutely right that if 2002 was not the final year
of the estate, the capital loss could not be passed out to
the beneficiaries. But in the original question the poster
DID say that it was the final year. (He said something to
the effect that he filed the FINAL return for a 2002 estate
in April of 2003, but it wasn't clear whether it was a
fiscal or calendar year estate.) It was only in a later
message that he said that the estate was not closed until
2003. He seems to be giving mixed messages. But losses
(capital or otherwise) cannot be passed out to the
beneficiaries until the final return.

Vida Freeman, EA

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"D. Stussy" <kd6lvw[at]bde-arc.ampr.org> wrote in
- quote -

SNIP
- quote -

If the estate was not closed by 12/31/2002 then you can not
pass out the capital loss to the beneficiaries until the
year the estate is closed and you file the real final 1041.
What ever capital loss was not used by the estate in 2002
may be carried to 2003 and passed out to the beneficiaries
if that is the final year.

If all assets were distributed and no income will be earned
in 2003 then you might be able to say the estate was closed
for tax purposes in 2002.

Martha Matthews, EA

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Hedberg wrote:
- quote -

Yes. 2003 will be its final year, not 2002.

By saying that it was final in 2002 means that it does not
exist in 2003.

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"Vida Freeman" <pippen[at]ix.netcom.com> wrote:
- quote -

Calendar year 2002

Wow. That's not the answer that I anticipated. I assumed
that because the loss in excess of $3000 could not be used
to reduce estate income in 2002 that it could not be used to
reduce beneficiaries' incomes for 2002 either. Does it
matter that the estate did not actually cease to exist until
2003?

Thanks

Harold

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Hedberg <hhedberg[at]swbell.net> wrote:

- quote -

The items on the 2002 K-1 form all go on the beneficiaries
2002 tax return, as specified in the column (c) heading. Its
right on the K-1 form. If necessary, the beneficiaries may
have to amend their 2002 returns.

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"Hedberg" <hhedberg[at]swbell.net> wrote

- quote -

If it was a 2002 calendar year estate, then the loss
belonged on the beneficiaries' returns in 2002. If it was a
fiscal year that began in 2002 and ended in 2003 (you don't
make that clear), then the info on the K-1 goes on the 2003
return of the beneficiaries.

Vida Freeman, EA

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Filed the final tax return for an estate in April 2003 for
tax year 2002. The estate had a long term capital loss for
2002 in excess of the $3000 maximum and because this was the
estate's final return, the loss in excess of $3000 gets
distributed among the beneficiaries and reported to them on
Schedule K-1 of form 1041 line 13C. The question that I
have is, is this capital loss carryover available for use
against the beneficiaries 2002 capital gains or 2003 capital
gains? The instructions for 1041 Schedule K don't seem to
answer this question.

Thanks for any thoughts.

Harold

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