The proceeds from a decedent's life insurance policy paid by reason of his or her death generally are excluded from income. The exclusion applies to any beneficiary, whether a family member or other individual, a corporation, a partnership, or an estate.
Based on what you have posted, the estate may have had a little bit of interest income. If this amount was $600 or less, you will not need to file a fiduciary return (Form 1041) for the estate. If no 1041 is filed, there will not be K-1s issued for the beneficiaries.
Additionally, there will be no income for any of the beneficiaries to report on their tax returns. Distributions from an estate are not considered to be taxable income.
