Filing a 1041

[RG]

I am working on a 1041 and have a question.  I have done it two ways. One with K-1's flowing to the beneficiaries and one with no K-1's.  The K-1's past the rental income and interest income to the beneficiaries  but the one with no K-1's there is no tax because it is below $600.00 taxable income.  I would like to file it without K-1's is that acceptable?

[IRonMaN]

If distributions were paid out during the year, you need the K-1s.  No distributions - no K-1s.

[RG]

I don't need an anvil.  But thanks for offering.

The mother of the five children had land that was sold and one child took land instead of cash.  The rest got the amount the their 1/5 was worth.  The land sale showed no gain or loss because it was sold for the amount it was valued at  the probate.  The rest of the money has not been distributed.  Since the money received is not taxable do I still have to do K-1's? 

[BobKamman]

Starting to look like a shell game.  What other assets were in the estate that generated income?  You can't just say that the money the beneficiaries got was just the proceeds from the land sale.  The money came from the income first, then the principal.  There must have been income from other sources because otherwise you wouldn't have anything to pay tax on.  

If there was net income, it's considered to have been distributed.  You don't have a choice.  But it probably results in less tax to the beneficiaries.  They may have already filed their returns, though, and won't appreciate not being told to wait for K-1s.

The one who got land is probably also included in the group of those who are considered to have received income.  But I always have to look that one up.  

[RG]

The income is interest on a checking account and rental income form 2 mobile home lots located on the land which was over $600 requiring filing.   This has not been distributed.  The tax return is from 05/01/2020 to 4/30/2021. The deceased died  the end of May.

Only proceeds distributed was the land sale proceeds and that was because one got title to part of the land for her share instead of cash.  The interest, rental income, and cash in bank has not been distributed.  When I did the return with no K-1's, there was no tax because the income after the expenses was less than $600.00.  When I do it with the K-1's there is taxable income on the K-1 for the beneficiaries because there is no $600.00 exclusion.