My husband's brother passed away last year. He lived in New York and did not own property in Pennsylvania.
My husband, a Pennsylvania resident, received an inheritance which was a share in the distribution of his brother's 401K. My husband received a schedule K-1 (Form 1041) from his brother's estate in New York.
We are reporting this income on both our Federal tax return and on a New York Nonresident return.
My questions are as follows:
1) Is there Pennsylvania inheritance tax on this and do we need to file the inheritance tax form? It is not from a Pennsylvania source.
2) Is this inheritance taxed in Pennsylvania as income and does it need to be reported on our Pennsylvania tax return?
3) Because this inheritance is a 401K distribution, does that change the way it is treated in Pennsylvania?
4) If this inheritance is not taxed on our Pennsylvania return, how do we indicate that in Turbo Tax?
Thank you.
