a trust has had net losses for several years, primarily due to commercial real estate. The trust will be wound up, either distributing the real estate and few other assets to the beneficiaries, or selling the real estate and distributing the remaining assets of the trust. If the real estate is sold, the loss carry forward may be reduced, but will not disappear.
I believe the loss carry forward is allocated to the beneficiaries upon trust termination. Is this correct?
If so, are there any limitations on each beneficiary's use of the loss carry forward? Can it be carried back on the individual's tax return? Used without limitation in the current year? Carried forward?
Thanks.