If the tax payer has died, do you use the 1099R simplified worksheet to calculate taxable amount or do you use the balance of cost to be recovered from the previous year?

mroot · ‎June 4, 2019

The tax payer died in 2017. The 2016 tax return 1099 R Simplified Method Smart worksheet calculation showed a positive balance in line 18 "Balance of cost to be recovered". Since this is the tax payer’s last tax return, can this value be subtracted from the total pension received in 2017 to get the 2017 taxable amount or do you still need to use the Simplified Method Smart worksheet calculated amount (i.e. line 14 “Taxable pension for year”)?

KatherineC · ‎June 4, 2019

If there is no survivor annuitant, the balance of the unrecovered cost can be claimed as a Miscellaneous Itemized Deduction (not subject to the 2% limitation.)

If there is a survivor annuitant, how the recovery is calculated will depend on the annuity provisions. But there would not be a write off of the balance of the unrecovered costs.

Please look here for further information.

View solution in original post

If the tax payer has died, do you use the 1099R simplified worksheet to calculate taxable amount or do you use the balance of cost to be recovered from the previous year?

Retirement tax questions