In the Year of Termination, a Trust Incurs a $20,000

question 72

Essay

In the year of termination, a trust incurs a $20,000 NOL. In addition, it has a $30,000 NOL carryover from the two preceding tax years. The trust distributes 40% of its assets to Sam, 30% of its assets to Alex, and 30% of its assets to Catherine. How much of the NOL can Sam (who has $150,000 of gross income)deduct on his return in the year that the trust terminates?

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Definitions:

Economic Value

The worth of a good or service determined by the market or its impact on an entity's financial condition.

Utility

The extent to which something provides economic value greater than its cost.

Practicality

The aspect of being sensible, realistic, and focused on what is achievable and efficient in real-world situations.

Educational Background

Refers to the formal schooling, degrees, and certifications completed by an individual.