You have all pages of the 1041 and no K-1s?
The 1041 is an estate (or trust) income tax return, so yes the income is taxable. If not distributed to beneficiaries there won't be K-1s and the estate pays the tax.
Yes, 2 Form 1041's and no K-1. TP thinks it's part of his inheritance but to me, it's earnings. Waiting to talk to his accountant who created the Form 1041s to see why she thinks the TP doesn't need a K-1.. Apparently there is some language in the decedent's will that the TP feels indicates it's inheritance..
If nothing was distributed, or required to be distributed, during the period covered by the 1041 there would not be any K-1s and all income would be taxed at the estate/trust level.
Also, if your client received a specific bequest, no K-1.