Turbotax is showing a negative taxable income of ($3,100) on Form 1041, Line 23. This is due to a $3,000 loss carryover plus $100 exemption from Line 21, having paid out income to the beneficiary. What effect does a negative taxable income have? Who benefits from this "credit" and how (given that the taxable income paid to beneficiary doesn't get reduced by the loss carryover)? The Capital Loss Carryover Worksheet shows that the loss carryover to '22 is reduced but how does the ($3,100) affect '21 taxes, whether the trust's or the beneficiary's?
