maybe i don't understand your situation correctly but with a grantor trust there is no capital loss carryforward. Everything pre-death flows out to the grantor including capital losses. post-death any capital losses remain in the trust to offset capital gains. if there are net capital gains (gains less any loss carryforward) in a year the trustee/administrator has the right (or obligation if specified by the trust) to treat the net capital gains as being distributed to the beneficiaries. Then any capital loss carryforward is utilized. This also occurs if the trust retains the net capital gains rather than distributing them. if the CLCO is not utilized by the final year of the trust, upon termination the CLCO is distributed to the beneficiaries.
