@Bookkeeper15 wrote:
Hopefully this clarifies a few things:
Line 5a & 5b - Inherited Deferred Comp Gross Distribution & matching taxable amount (1099-R line 1 & 2a being the same) (22,000)
I understand that I had to pay the Federal tax on the Gross Distribution. But it's not like it was MY deferred comp account; It was inherited. I feel that this is affecting my taxes in a way that should/can be avoided with perhaps a workaround.
I feel like my AGI should not include the deferred comp inherited income. In other words, Inherited income shouldn't show up on my AGI.
Also, I feel like I should qualify for the EIC based on my actual Earned Income and not on the AGI which includes inherited income. If I had not inherited the 22000, my earned income of 5000 (5700-700 Adjustments) would have qualified me.
Because is is NOT YOUR deferred comp. You cannot inherit deferred comp and treat it as of it was yours - it is not.
Why would you think inherited money would not be taxable and add to your AGI? - It will. There is no way for it not to.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
