This irrevocable trust has been terminated. It earned no income. All properties and equities were sold at a small loss relative to their step-up basis. So there is only corpus distribution; no income distribution. Therefore K-1s are not required, right? Is a tax filing for the trust even required? The IRS says “Trusts must file a Form 1041, U.S. Income Tax Return for Estates and Trusts, for each taxable year where the trust has $600 in income.” The trust had a small loss.
