@jtax wrote:
One thing you could do as trustee (using your example of $41k in dividends and a $3k capital loss) is not to distribute $41k (if the trust instrument gives you that discretion) in that tax year. Instead distribute $38k or something less. Say $38k.
That is a decent solution, assuming the trust does not require that all income be distributed currently.
However, the "zeroed out" result is at the expense of the beneficiary in the sense that the beneficiary receives a distribution that is $3,000 less.
