I've been searching for answers on how to report the principal distributions to irrevocable trust beneficiaries and this string is the closest I've found to what I'm looking for. I'm the trustee for my mother's estate. I'm wading through the muddy 1041 waters just trying to figure out how to complete these forms since this wasn't any grand estate. Her home was in the trust and she had about $10,000 in her bank account. We sold the home for slightly less than the appraised market value. I distributed the money from the sale to my siblings - eight of us. Q.1 - I think the sale of the home is reported on Form 8949 and then schedule D - is that right? Q.2 - Where do I report the distributed money (principal) or do I not report that? Q.3 Since there is no income, do I issue K-1's to my siblings showing that, and does the principal get reported anywhere on the K-1's?
