The Schedule D as indicated, is the appropriate form to enter the capital loss carry forward, however on the Form 1041 you will be using the 'Distributable Net Income' section to reduce or eliminate the income from the estate income. Then it is passed onto the beneficiaries on the K-1s.
- Distributable net income (DNI). The income distribution deduction allowable to estates and trusts for amounts paid, credited, or required to be distributed to beneficiaries is limited to DNI. This amount, which is figured on Schedule B, line 7, is also used to determine how much of an amount paid, credited, or required to be distributed to a beneficiary will be includible in his or her gross income.
- Instructions for Form 1041 2021
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