C:14-42 Tax Treatment of Capital Losses. A simple trust had a long-term capital loss of $10,000 for 2014 and a long-term capital gain of $15,000 for 2015. Its net accounting income and DNI are equal. Explain the tax treatment for the 2014 capital loss assuming the trust is in existence at the end of 2016. C:14-43 Tax Treatment of Capital Losses.

Refer to Problem C:14-42. How would your answer change if instead the trust were a complex trust that makes no distributions in 2014 and 2015? Assume the trust earns $8,000 of corporate bond interest income each year.