: Grantor Tax Information Letter Why do some trusts issue a Sch K-1 for the beneficiaries, while others only a "Grantor tax information letter"?

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Typically, the K-1 comes from trusts whose terms dictate distribution of earnings by the trust during the year. The K-1 information will flow right to the beneficiary tax return.

The second return you describe appears to retain its earnings, and let beneficiaries know about such activity as a reporting activity, but the trust itself would have filed the return, and paid the tax due from the trust itself.