@karlm wrote:
I'm wondering if the IRS mandates that the K-1 distribution to a beneficiary must be withdrawn from the trust or if the trustee can choose to leave the K-1 distribution in the trust?
If the terms of the trust provide that all income is to be distributed to the beneficiary currently, then the beneficiary is responsible for paying any tax due on that income whether the income is actually distributed or not (per Section 652).
See https://www.law.cornell.edu/uscode/text/26/652
