Question

U O IS UUUUUU Un states rom 1041, without any consideration to what the beneficiaries actually do with the property after the decedent's death. Mark for follow up Question 27 of 75. If an ongoing estate generates a capital loss during the first year of administration, which of the following statements true? The entire loss is passed through to the beneficiaries immediately. The loss is suspended and carried forward indefinitely The full amount of the capital loss is automatically carried forward and passed through to the beneficiaries in the estate's final year. The loss may offset up to $3,000 of income earned by the estate during the year when determining the net capital gain/loss of the estate with any remaining capital loss carried forward. Mark for follow up « Back Save / Return Later Summary Next >>

Answer 1

If an ongoing estate generates a capital loss during the first year of administration which of the following statements is true:

B the losses may offset up to $3000 of income earned by the estate during the year when determining the net capital gain or loss of estate

Explanation :

Capital losses that exceed capital gains in a year may be used to offset ordinary taxable income up to $3,000 in any one tax year. Net capital losses in excess of $3,000 can be carried forward indefinitely until the amount is exhausted.