Capital losses can be used to offset capital gains. If there are excess losses, they can be used to offset up to $3,000 of ordinary income ($1,500 for married persons filing separately), which includes interest on bonds that are not tax-exempt. Any excess loss can be carried forward indefinitely and used in the same manner.
A trust created during the lifetime of the person who created the trust. If irrevocable, income on the trust principal is generally shifted to the trust beneficiaries.