Question 27 of 75. How are carryovers of losses generally treated in the final year of an estate? Capital losses are allocated to the estate only and are not passed through to the beneficiaries. Carryovers not absorbed in the final year are lost. Net operating losses must be carried back two years on the final return. Passive activity losses pass through to the beneficiaries in the form of an increased basis in the underlying property interest. Mark for follow up