If the trust is irrevocable then any income retained in the trust is taxed to the trust at applicable trust tax rates. If the income is passed through to the beneficiaries of the trust then the income is taxed to the beneficiaries at their tax rates.
The trust would report the income on Form 1041. Any income passed through to a beneficiary would be reported on a Schedule K-1. The beneficiary would report the income from the K-1 on his/her personal income tax return.
If the other recipient received income from the trust then the other recipient should have also received a K-1 unless for some reason the trust provided for a distribution of principal that may not have been taxable. Generally, distributions of principal are also reported on the K-1 but identified as nontaxable.
You may want to contact the accountant or tax preparer that completed the form for an explanation.
A K-1 is issued when the beneficiary receives income that is taxable. The taxability of the income depends on the type and character of income that is received. The type and character of income would be identified in the specific boxes on the K-1. For example, if there was an amount in box 1 of the K-1 that would indicate that interest that was earned in the trust was passed through to the beneficiary. The interest would be taxable to the beneficiary and reported as interest by the beneficiary on line 8a of his/her Form 1040. If there was an amount in box 2a of the K-1 then it would be taxable as ordinary dividends and reported on line 9a of the beneficiary's individual tax return. If it was tax-exempt income it would be reported in box 14 with a code A.
If a distribution is from principal (not income) then some practioners do not report it on a K-1 at all as it is not taxable. So it's possible that if the other beneficiary only received a distribution representing principal and not income then a K-1 may not have been issued to that beneficiary.