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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link=blue vlink=purple><div class=WordSection1><p class=MsoNormal><font size=3 face=Calibri><span style='font-size:12.0pt;font-family:"Calibri",sans-serif'>[originally posted under QDOT topic]<o:p></o:p></span></font></p><blockquote style='margin-top:5.0pt;margin-bottom:5.0pt'><div><p class=Body><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Surviving Spouse, beneficiary of QTIP and Credit Shelter Trusts, enters into agreement with remainder beneficiaries whereby SS receives all of QTIP plus a cash payment from CST in exchange for termination of both trusts and payment of remainder in CST to remainder beneficiaries. There are capital assets loss carryovers in QTIP attributable to prior securities sales from that trust in years past. Client is trustee of both trusts, and asks if losses can be allocated, in whole or in part, to remainder beneficiaries. My view is that since, pursuant to IRC Sec. 2056(b)(7) all QTIP income must pass to surviving spouse for life (she is still alive), losses must follow the assets, and are, in essence, a form of negative income which must be allocated entirely to SS. The theory additionally is that the losses can actually add to income by becoming tax deductions on distributed income and future gains on asset sales, as well as the logical idea that the losses must follow the assets distributed to SS. <o:p></o:p></span></font></p><p class=Body><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Anybody think the losses can be allocated to anyone other than the SS? <o:p></o:p></span></font></p><p class=MsoNormal><font size=3 face=Calibri><span style='font-size:12.0pt;font-family:"Calibri",sans-serif'><o:p> </o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>Samuel L. Furgason<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>Samuel L. Furgason, Inc, PS<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>(Not accepting new business)<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>10655 N.E. 4<sup>th</sup> Street, Suite 701<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>Bellevue, Washington 98004<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>MAIL TO:<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>PO Box 102<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>Medina, WA 98039-0102<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>Work: (425) 649-1122<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>Cell: (425) 445-9909<o:p></o:p></span></font></p><p class=MsoNormal><font size=2 face=Calibri><span style='font-size:11.0pt;font-family:"Calibri",sans-serif'>Email: <a href="mailto:sam@furgasons.com">sam@furgasons.com</a><o:p></o:p></span></font></p><p class=MsoNormal><font size=3 face=Calibri><span style='font-size:12.0pt;font-family:"Calibri",sans-serif'><o:p> </o:p></span></font></p><p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:12.0pt'><o:p> </o:p></span></font></p></div></blockquote></div></body></html>