Business & farm

To answer my original question, there is no reason for the program to bring up the NOL declaration form suggestion after the error check.  I'm not sure why this was flagged since the Trust has some income and a capital loss, but no Net Operating Loss.  The fact that I was completely unable to find the form it described generated even more confusion.

 

It looks like it pays for the Trust to not distribute any income in this situation, and instead use it to offset part of the Capital Loss.  The excess Capital Loss (that not cancelled by income) gets reported on line 14 of the Capital Loss Carryover Worksheet, which doesn't get printed unless you specifically request the program print out supporting forms.  Then when the Trust is closed, the carryover information needs to be gathered from previous years, and the loss credit should transfer to the beneficiaries on the final tax return.

 

Thanks everyone for pointing me in the right direction.

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