THE TRUST HAS A CAPITAL LOSS CARYOVER FROM A PRIOR YEAR IN EXCESS OF $41K. THE CAPITAL LOSS DEDUCTION IS CORRECTLY LIMITED TO $3K ON THE FORM 1041, PAGE 1 LINE 4. HOWEVER, THE CAPITAL LOSS CARRYOVER WORKSHEET IS NOT REDUCTING THE CARRY FORWARD TO NEXT YEAR BY $3K. HAS ANYONE ELSE RAN INTO THIS ISSUE?
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Yes, thank you for checking back. With your response, I was able to go back and review the return, and the Summary, and because the $3k loss was not used in the current year, it does not reduce the carry forward. It is always so confusing because it shows up on page 1 as a $3k loss, and so I automatically assume the carry forward should be reduced. It even stumps the attorneys.