topic I have a irrevocable trust can deduct a $10,000 loss against $15,000 of dividends ? in Deductions & credits

I have a irrevocable trust can deduct a $10,000 loss against $15,000 of dividends ?

williamjreich — Sat, 18 Dec 2021 15:19:13 GMT

Re: I have a irrevocable trust can deduct a $10,000 loss against $15,000 of dividends ?

Anonymous_ — Sat, 18 Dec 2021 15:56:45 GMT

What type of loss? Is this a passive loss, capital loss, business loss (which would be unlikely)?

Are you using TurboTax Business to prepare a Form 1041 for the trust?

More details are needed as your question is overly broad.

Re: I have a irrevocable trust can deduct a $10,000 loss against $15,000 of dividends ?

Hal_Al — Sat, 18 Dec 2021 16:40:18 GMT

Q. Can we deduct a $10,000 loss against $15,000 of dividends ?

A. Simple answer: no.

A capital loss can only be deducted DIRECTLY against capital gains, including capital gains distributions (box 2a on a 1099-DIV).

Only $3000 of Capital losses may be deducted against ordinary income, including dividends (including "qualified" dividends). Any excess (over $3000) is carried forward to the next year. Although qualified dividends are taxed at long term capital gains rates, they can not be deducted directly against capital losses.

Re: I have a irrevocable trust can deduct a $10,000 loss against $15,000 of dividends ?

Anonymous_ — Sat, 18 Dec 2021 18:06:16 GMT

Note that if the $10,000 loss is a capital loss, you are distributing all of the ($15,000) dividend income to the beneficiary(ies), and this is not the final year of the trust, then then entire $10,000 loss will be carried forward to the trust's next tax year.