What happens with a 1040 filer's capital loss carryover when the taxpayer dies? To simplify the question - - If there is only one heir, does the heir receive this as a benefit for use in a future tax year on his 1040?
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No, the carryover losses can only be applied to the decedent's personal tax return - they do not transfer.
Rev. Rul. 74-175:
A capital loss and a net operating loss from business operations sustained by a decedent during his last taxable year are deductible only on the final return filed in his behalf; such losses are not deductible by his estate.
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