1041 Trust and K1?

[jhouse78]

Are K-1s required for a 1041 return if the trust did not earn any money?  I'm trying to complete what I thought was a fairly simply trust return with TT Business, the trust had investments that were sold at a loss, there are no taxable earning at all, only distributions.  Beneficiary distributions were made, but is it then required to send each beneficiary a K-1?  

[jhouse78]

Thank you for the information!  So just to clarify, the trust DID earn income in excess of $600 but also experienced losses from bond sales resulting in a loss (no taxes owed)…the only thing distributed to beneficiaries WAS principal however is the K1 required to report the loss?  Or can I safely submit the 1041 without K1s?

[jhouse78]

Thank you!  Final question: if I don't need to pass through anything to the beneficiaries (meaning only principal was distributed) in order to let the trust pay its own taxes (which is nothing) can I skip the K1s by just leaving the beneficiary section blank in TurboTax? 

[jhouse78]

Thank you!  I guess what I meant was the trust DOES have income requiring the 1041 but losses from bonds sales offsets it – in the end there is -$2000 tax owed.  So in that case, can I safely submit the 1041 and just bypass the Beneficiary info/K1s entirely and basically forfeit the loss?  This is the final return for the trust.  

I'm just trying to keep things simple!

[jhouse78]

I know but two of them are refusing to give me their SS#s which (I've learned) is going to require me to attach affidavits, etc. to the return and potentially incur a fine, etc.  I'm trying to avoid that if possible. There's no mention in the trust instrument that I have to include carryover loss in distribution, I would do it obviously if everyone was cooperating.   One of them DID give it to me, so I could just give it all to them but I guess that would appear as preference.  It's a thankless job being a trustee. 🙄