dmertz
Level 15

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.