In 2013 the estate return I prepared had a gain, and the heirs were all taxed on the gain via K-1's. In 2014 the estate had a loss, but the H&R Block Premium & Business tax software didn't generate anything which would pass the loss along to the heirs. It seems logical that if the gains were distributed then the loss could be as well.

So my question is can the estate pass along the loss to the heirs? If so, I should be able to ask H&R Block how to make that happen with their software.

I have been unable to find any resource that addresses this scenario, and any help would be greatly appreciated.