RaifH
Expert Alumni

Get your taxes done using TurboTax

No, there is no death benefit exclusion for payments from your aunt's pension. Please see the Inherited IRAs and Retirement Accounts section of this TurboTax article. Since the pension is generally funded with untaxed money, the distributions are still taxed, even if it is the beneficiary who receives them. 

 

The 1099-R for the distribution from your aunt's pension should have the information required to accurately report this on your taxes. The entire distribution might not be taxable if your aunt had any employee contributions with after-tax dollars. The code in Box 7 should be a 4. 

View solution in original post