Yes, According to the IRS instructions for Form 1041 and Schedule B, you need to report the full amount of the distribution on line 10, which includes both the corpus and income portions. Even if the income portion is $0, the full distribution amount should be entered.
According to this IRS source, non-resident aliens are not required to file a NR for the following interest sources, unless withholding was taken, credit for the withholding, and/or refunds of the withholding may be available
- U.S. bank
- A U.S. savings and loan association
- A U.S. credit union
- A U.S. insurance company
- Portfolio Interest (Described in “3. Exclusions From Gross Income" – “Nonresident Aliens” - "Interest Income" and its subsection "Portfolio interest" of Publication 519, U.S. Tax Guide for Aliens)
For the foreign taxes, go to the K-1 Worksheet and remove the Foreign Taxes in line 14B so this isn't passed to the beneficiaries.
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