A 401(k) with a designated beneficiary has nothing to do with the estate (other than being part of the gross estate for potential estate tax purposes on Form 706). Nothing about such a 401(k) goes on an estate Form 1041; with a designated beneficiary there can be no reportable income to the estate from the 401(k).
@Schmidlap , in your case I assume that the decedent died after 2019. With there being a designated beneficiary of the 401(k), the 5-year rule is not an option. Non-Eligible Designated Beneficiaries would be subject to the 10-year rule (with annual RMDs if the decedent died after their Required Beginning Date for RMDs and Eligible Designated Beneficiaries would be subject to annual beneficiary life-expectancy RMDs (with the option to use the 10-year rule if the decedent died before their RBD).
If instead the estate was the beneficiary due to there being no designated beneficiary on the 401(k), no rollover to an inherited IRA is permitted. In this case, distributions can only made to the estate with the estate reporting the income on Form 1041, passing the taxable income through to the estate beneficiaries on Schedule K-1 for the income to be included on the beneficiaries' tax returns and the estate taking a deduction for Distributable Net Income.
