Trust with income but no distributions for 2021

[lthorrat]

Hello, 

I am the trustee for my mother's living trust.  She died in late 2020.  This is first year that we've had to file a 1041 and are a bit confused.  The trust earned some dividend income in 2021, so a 1041 needs to be filed.

Where I get confused is with distributions and responsibility for the beneficiaries.  There are 3 beneficiaries to the trust.  One is a minor and there are stipulations as to how and when funds should be disbursed.  The other 2 of which I am one, could have received funds from the  trust in 2021 but elected to keep all monies intact.  Do I need to file a K-1 for each of the beneficiaries and do they need to include these funds on their taxes?

[PatriciaV]

Yes, all beneficiaries should receive Schedule K-1 from the Trust, reporting the actual activity for the Trust. The K-1 will report any income or deductions that should be included on the beneficiaries' personal tax returns. If no distributions were made, that information would not be reported on the Trust return or the K-1s.