In TurboTax Business, on Estate's 1041, when there was no income distribution from estate to beneficiaries, what is recommended approach for K-1s... none or all w/ zeros?

[5onTheHill]

Supporting details:

1. I need to file the Estate's 1041 since the estate had income from a stock sale > $600
2. The stock sale proceeds were not distributed to the beneficiaries
3. No other estate income was distributed to the beneficiaries

Recommended approach #1: Do not generate any K-1s

• I.e.: in TurboTax, DO NOT specify any beneficiaries.
• Result 1: the Estate's 1041 Box B will correctly indicate that there are 0 K-1s attached. 
• Result 2: TurboTax will NOT generate K-1s with income = 0 for attaching/filing with the Estate's 1041 and therefore each beneficary will NOT receive a K-1

Recommended approach #2: Generate the K-1s with income = 0

• I.e.: in TurboTax, specify all the beneficiaries.
• Result 1: the Estate's 1041 Box B will correctly indicate that there are <n> K-1s attached. 
• Result 2: TurboTax WILL generate K-1s with income = 0 for attaching/filing with the Estate's 1041 and therefore each beneficary will receive a K-1 which they would keep for their records.

[Critter]

Option #1 is not wrong but for clarity I would go with option #2  and then you can either tell the beneficiaries they will not get a K-1 this year or mail them the K-1.