Retirement tax questions

I urge you to consult with an income tax professional who specializes in estate/trust taxation concerning this matter.

Since the date of death was in July of 2015, you have the option to select a fiscal year when filing the initial income tax return for the estate (e.g., beginning July 1, 2015 and ending June 30, 2016). In that event, each beneficiary would include his/her share of the estate income in his/her return for the tax year in which the last day of the estate's tax year falls (i.e., TYE 2016).

See https://www.irs.gov/publications/p559/ar02.html#en_US_2015_publink100099775 and Treas. Reg. §1.662(c)-1.

Again, I highly recommend an in-person consultation with a qualified tax professional as it may inure to your benefit, and that of the beneficiaries, to select a fiscal year for the estate on its initial income tax return.

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