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Retirement tax questions
Yes. According to this Turbo Tax link written by linaJ2018, " Inherited 401(k) plans are (or eventually will be) taxable but the amount of tax depends on the 401(k) plan rules.
For example, many 401(k) plans require a lump-sum distribution upon the death of the account holder. The surviving spouse can roll the 401(k) into an IRA, but if the beneficiary is not a spouse, s/he might be forced to take a lump-sum payment and the tax bill that goes along with it.
When it comes to inherited IRAs and other retirement plans, the rules can get pretty complicated. When you enter your inherited IRA or retirement plan in TurboTax, we'll ask a series of questions to determine how much, if any, is taxable on this year's return."
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‎April 11, 2021
1:58 PM
2,352 Views