filling out K1 when distributing principal and earned interest from CD in a trust

[trustenforcer]

If principal and earned interest are distributed from a trust but all taxes have already been paid in full by Estimated Taxes, how would I fill out a K1?

[Hi Palms]

Normally the distribution carries through DNI if made in the same year as the income is earned. Nevertheless, if the trust has paid any tax due a K-1 is not necessary or you could provide one to each of the beneficiaries with no numbers in Part III to let them know there is nothing to report.