@Gabe_2012 wrote:
Question: If all debts and taxes are paid by the trust prior to the distributions, are K1s required for the final 1041 fiduciary tax return?
Distributions carry with them items of income, gain, deductions and credits through to the beneficiaries via the K-1s.
However, if the trust has paid all federal income tax due on taxable income reported on Form 1041, then all that is left to distribute to the beneficiaries would be corpus (principal). Distributions of corpus are not reported on K-1s (1041) so they do not have to be issued in that instance.
