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Level 2
September 27, 2023

Section 643(e)(3) election

  • September 27, 2023
  • 1 reply
  • 7 views

I am preparing the final return for a complex Trust with a lot of unused Passive Losses that cannot be distributed to the Beneficiary.  I read different articles that the Trust could make a Section 643(e)(3) election to report the distribution of Trust assets at FMV.  The Trust would report the Gain, which would be offset by the unused losses.  The one question I have - Does the Trust have to show all assets being distributed at FMV?  Can I choose which assets are "sold" at FMV, and those that are distributed to the Beneficiary at their tax basis?

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1 reply

sjrcpa
Level 15
September 27, 2023

Look at 643(e)(3)(B).

It applies to all property distributed.

The more I know the more I don’t know.