I went into the schedule D cap gains and losses page and under 18 b I allocated zero to the beneficiaries - it put the number on the estates or trusts column 2 - and it is now not showing up on my k1's or on the trust - I am assuming since it is an ordinary loss from loss on rentals that it can be netted 1st with the 1250 recap and only leave capital gain long term treatment - I had a small amount of short term capital gain too - and it got rid of that after I allocated the 1250 gain to the trust - and the trust doesn't owe anything on it - so I believe the return to be correct

to bad I can't charge for the many hours the software spent me doubling up this calculation 

pretty certain I am good now

would love to hear your response