Can you give more detail please ?  

Sounds like you possibly have a trust.

You may need to study the trust document (possibly get a legal opinion) on whether the trust allows this type of transaction which may be a distribution of the trust corpus. (hope I got that last word right - been several years since I went to a trust seminar)

It's an irrevocable trust doing a 1031 exchange looking to take out some boot.  Normally capital gain is allocated and taxed to the trust as principal.  However, I thought there were some exceptions that allow cap. gain to be distributed, and therefore taxed to the beneficiary per sec. 1.643(a)(3).  1) reasonable exercise of discretion by trustee and 2)  three methods available to allocate cap. gain--one of which is to allocate to corpus but distribute to a beneficiary and appears to be a flexible option.  

In this case the benef. has an NOL carryforward to absorb the income whereas the trust does not.  

This would be a distribution of corpus.  I realize the trust doc would have to give the trustee discretionary power to distribute principal.  This would be a one-time occurrence.  This trust does not usually incur capital gain income