The answer depends on applicable state law and the terms of the will, if any. If the income was required to be distributed concurrently, even if it was not distributed it must be included on Schedule B line 9 and reported on Schedule K-1 as if it had been distributed. If the income was not required to be distributed concurrently and was retained by the estate, making the income taxable to the estate, the income would not be reported on Schedules K-1.
