- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Get your taxes done using TurboTax
There is nothing in TurboTax that would cause a 25% excise tax to be assessed on a distribution paid to you as beneficiary. The only type of distribution where a 25% excise tax could apply is if the Form 1099-R has code S in box 7 indicating that the distribution was paid to the participant in a SIMPLE-IRA plan within the first 2 years of participation in that plan. No distribution paid to a beneficiary would have code S.
Make sure that you have answered Yes, when asked if the IRA held by XXX is an inherited IRA.
Where are you seeing a 25% excise tax being applied?
Are you confusing normal income tax liability with an excise tax? It's not unreasonable that you would have a marginal income tax rate of around 25%. This is taxable income, after all.