Long story....my mother in law passed away May of 2023, and she had some sort of retirement account. There was about 210,000k in it. A few weeks after her passing, mother in laws financial "guy", whoever took care of the account, contacted us, and said my wife and her 2 sisters would be splitting whatever was in the account. We would be receiving our 3rd (about 71k), into our bank account, and we were to contact him within 10 days? I think...so we could send the entire amount back to be put in an inherited ira fixed annuity account. As long as we did this, (which we did within 5 days) it would not be taxed (yet), and would have zero impact on our 2023 taxes, filed in 2024. It would only be taxed starting after the 1 year anniversary as we have to empty the account within 10 years he said, taking 10% (or more) every year til its emptied out.
If we didn't, then we would be taxed (and penalized) on the entire amount.
Today my wife got a 1099-r (in her/wife's name, not the estate of her moms/or her moms name as she is executor). It lists the entire 70k as gross and taxable. I go to put this into turbotax, and if I select "i inherited this ira", we go from being due a 5500 refund, to owing 12k. It does not popup "was this rolled over into"......but yet if I uncheck that, it asks me was it rolled over to a new ira..or whatever and we are back to getting a decent refund. Were we given bad advice from her moms financial guy? He seemed to think it odd or incorrect that the 1099 that we received was in my wife's name, not her moms...or "the estate of". Was the 1099 reported incorrectly? I hate to have to find an actual accountant..time...money.
