I understand that the short-term or long-term losses in the trust should be able to offset any gain in the trust. My original question was whether the short-term loss can pass through to my own stock account to offset my short-term gain in that account or not. If so, in this example, I would like to use my $20k short-term loss in the trust to first offset $10k short-term gain in the trust, then offset $10k short-term gain in my own account. Finally, I will pay tax for the remaining $10k long term gain in the trust.
Based on the answers that I have received, I would like to confirm my understanding as follows:
The loss in the Bypass trust (long or short) can only offset the gain in the Bypass trust (long or short), it cannot pass though to my own account to offset my gain there even if the trust income is supposed to distribute to me and taxed with my tax ID (not taxed with trust ID).
