I received a principal distribution for 100,000 last year from my mothers trust. This was not earned income. My K1 shows that 100,000 on line 5. My tax preparer states that this is taxable income, but I don't think it should be. Is the K1 wrong or my tax preparer?

you aree right.
It depends on whether the cash distribution is a distribution of income to the trust that was distributed or whether the distribution to you was a distribution of trust principal. as it was a distribution of trust principal,as you said, then the distribution is not income taxable to you as an inheritance. If it was a distribution of income, and the trust has not paid income tax on the income which is usual because the taxable rate for income of a trust is higher than distributing to beneficiaries and letting them pay tax, then you must pay income tax on the distribution.