How to turn off K-1s for beneficiaries receiving principal only on a 1041

[user1945]

Beneficiaries are not receiving income, only principal. TT is not offering an option other than distributing income based on their portion of regular distributions.

[Utie]

Distributions ------ any distributions ------ carry taxable income through to your beneficiary. Turbotax is doing this the right way. If you don't want it to happen the way it did you'll have to not make distributions or make distributions but not report them anywhere on the return and let the trust pay the tax.

[user1945]

The taxable income should be taxable only to the estate, not the beneficiaries. They are not remaindermen, they only get a specific bequest from the principal. Why would they be liable for tax on income they don't receive?

[Utie]

Yeah but you didn't say these were specific bequests and those are different and shouldn't be entered as distributions ----- just don't enter them as distributions and you won't have a problem. An amount paid as gift-bequest of a specific amount of $$$ or specific property isn't supposed to be recorded as a distribution on the return.

[user1945]

Thank you. I thought by saying beneficiaries received  only principal that it would be obvious they received a specific bequest. But again, thank you. Although it does seem as if distributions should be in an estate tax return. But who's to question the IRS, eh?