Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
My elderly mother has a trust with one of the large investment firms. To my deep regret, they have discretionary investment authority. One of their investments for her was into an aggressive growth fund (their own, naturally) in early 2000. Need I say more?

The fund had dropped over 40% when I convinced her to tell the trustee to sell the fund in mid-2001. After first ignoring her instructions, they finally sold it and remitted the proceeds. We were confident we could take the full loss for tax purposes.

Two months after the sale, the quarterly trust account statement came. It, of course, showed the sale at the full capital loss. However, on the same day as the sale, they "purchased" for the account that same fund at an amount of nearly 40% of the loss. So it appears we can't use that portion of the loss against 2001 or future taxes since it was acquired within 30 days (30 minutes, maybe?) of the sale.

The company wrote that this was a distribution. We've asked them for more information but they haven't responded to that yet.

We would appreciate any thoughts.





Print the post Back To Top
No. of Recommendations: 0
You can sell the distribution which has an adjusted basis that absorbed the loss. You should have done that in 2001 when you discoverd the distribution. All is not lost, however, as you can take that loss by selling the distribution in 2002. ed
Print the post Back To Top
Advertisement