@mjc4maureen wrote:
long as fund is there longer than 5 years as I understand. So if my beneficiary withdraws all of it once on the 10th year, then it should pass 5 years mark therefore, all is tax free. In other words, no income tax needs to be reported, right?
(2) It sounds like my executor needs to file the year I die both the 1040 and the 1041 tax returns. Yes? And 1041 tax return only needs to be filed one time not every year thing because we only die once, right? In fact, these would be my last tax returns. No more after that.
If you have named beneficiaries in the IRA and your estate is not the beneficiary then it passes directly to the named beneficiaries by the IRA custodian and the executor has nothing to do with it and never sees it.
The 5 year rule does not apply to beneficiaries.
**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.**
