You probably do not need to complete the K-1-T as it is not attached to the IL-1041 per the instructions. Do not attach any Schedule K-1-T that you complete and issue to your beneficiaries or any Schedule K-1-T(3) you complete to your Form IL-1041. Since you are distributing out loss instead of income, then no K-1-Ts would need to be completed. The non-resident beneficiaries would not have a filing requirement due to the loss being the only item distributed from the trust. You only need to file the IL 1041. For Illinois Income Tax purposes, you must give a completed Schedule K-1-T and a copy of the Schedule K-1-T(2), Beneficiary’s Instructions, to each beneficiary if any part of your income is paid, credited, distributed, or deemed to have been paid, credited, or distributed by you to that beneficiary.
