It is unearned income to the estate that must be reported on the estate's income tax return (Form 1041) for the estate income tax year in which the distribution was received by the estate. The distribution is taxable in the same manner as it would have been taxable to your uncle had it been distributed to your uncle prior to death (except that it is not subject to any early-distribution penalty). The estate can pass this Distributable Net Income through to beneficiaries of the estate, to be taxable to the estate beneficiaries instead of to the estate, by reporting it on Schedule K-1 (Form 1041). You would report the Schedule K-1 on your personal tax return for the year that includes the end date of this estate's tax year covered by this Schedule K-1.
The taxable amount of this income is reported on Form 1041 line 8.
The estate tax return (Form 706) will include the value of the retirement account regardless of how it was distributed.
