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Capital loss for an estate beneficiary

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Q I am the sole beneficiary of my father’s estate. The estate had a net capital loss for 2006. Can I use the loss to offset my capital gains? R.J.K., Portland, Ore.

A Not for 2006. The net capital loss reduces the estate’s income, but the estate’s beneficiary cannot currently deduct the loss. If the estate distributes all of its income, it cannot claim a tax benefit for the year of the loss. When the estate is terminated, any unused loss can be claimed by the beneficiary in that tax year.

Tip: Consider this future benefit when you analyze taxes for offsetting capital gains and losses.

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