I have a client that is filing their final return, form 1041, and is a Complex Trust. The trust had no income of any kind for the year. The money in the trust was and has been previously taxed, it was the remaining cash. The trust has 3 beneficiaries, it was a family trust. It is the mother and two adult children; the father died long ago and established this trust. The mother distributed all remaining cash to her, and the children agreed and then closed the bank account and the trust. Since the cash distributed to the mother was 100% previously taxed, I am not clear that the distribution to the mother needs to be reflected on the final return to be filed.
thank you.