Yes, it can be.
A
distribution from a retirement plan or IRA (except a Roth IRA) is taxable
income to the heir or beneficiary to the same extent the distribution was
taxable to the decedent if the decedent were still alive.
Unlike most other
assets, retirement plans and
IRAs do not receive a basis step up at death. In other words, you do not get the current market value of the
IRA as your inherited basis.
Per
IRS Retirement Topics -
Beneficiary https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary Inherited from
someone other than spouse.
If the inherited traditional IRA is from anyone other than a deceased spouse:
- The beneficiary cannot treat it as his or her
own.
- This means that the beneficiary cannot make
any contributions to the IRA or roll over any amounts into or out of the
inherited IRA.
- However, the beneficiary can make a
trustee-to-trustee transfer as long as the IRA into which amounts are being
moved is set up and maintained in the name of the deceased IRA owner for the
benefit of the beneficiary.
- Like the original owner, the beneficiary
generally will not owe tax on the assets in the IRA until he or she receives
distributions from it.
To enter your 1099-R:
- Type 1099-R in the search box
and click search.
- Click on Jump to 1099-R.
- Continue with the onscreen interview.
For
expanded information and video, click on Where do I enter my
1099-R?
Related information:
