Trust inheritance in AZ - Cash distribution of inherited money not 2025 income

[dspco1]

I inherited a trust in AZ when my parents passed. They had cash in the trust. I distributed the cash to my sister and i as stated in the trust. The cash was not income in 2025 it was from the accumliation of income since the trust was made back in 1998.  I was told the cash needs to be reported.  I had to get a new EIN number in 2025 due to the passing early in that year.  How do I report this cash distrubtion.  If I mark it as a distribution it includes the 15K that was income in the trust but only taxes myself and sister on the 15K.  Its asking me since the income is less that the amount distributed i need to prepare a schedule J unless the trust has no previously accumlated income.  Since this is a new EIN number and we inherited the trust do i show the distribution of the cash and not file anthing else?  The K1 shows the 2025 income the trust has and nothing else. 

[M-MTax]

You most likely do not need to complete Schedule J, and TurboTax always flags your 1041 if you have a distribution that exceeds the DNI.

See https://www.irs.gov/instructions/i1041#en_US_2025_publink1000286254

[dspco1]

So on Schedule B line 9 shows the income required to be distributed currently.  Its actually principal. Line 10 is blank and line 11 is the total.  Same as line 9.  When it kicks out my K1 the distribution should not be taxable since it was taxed in earlier year prior to us inheriting this trust and its not.  Everything look right but I have never done a trust tax form.  The program says during the check " You incicated on Form 1041, page 1, line A that you are a complex trust and since Schedule B line 11 total distributions is more than Schedule B line 8 (accounting income) you need to prepare schedule J, UNLESS the trust has no previously accumulated income.  When my parents died.  We got an EIN number for the trust and enherited it as co trustees.  So with our EIN number we have no income other than the 15 K from interest, dividens, and rent monies from a rental home in the trust.  So it sounds like what I have done is correct.  I am just trying to verify this since the error check said that.

[M-MTax]

You don't need to prepare Schedule J unless the trust was:

• Previously treated at any time as a foreign trust (unless an exception is provided in future regulations); or

• Created before March 1, 1984, unless that trust would not be aggregated with other trusts under the rules of section 643(f) if that section applied to the trust.