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posted Apr 13, 2024 7:50:57 AM

Can you 401K is split between siblings but have only one 1099-r?

we took a RMD from an inherited 401k and split it between siblings. Can we split it between the siblings?

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Level 15
Apr 13, 2024 9:36:56 AM

There is no "we" when it comes to receiving a single distribution from a 401(k).  Distributions from a 401(k) are paid to individuals, not to groups of individuals.  Each beneficiary of a 401(k) receives their own separate distributions from the 401(k) and each beneficiary's distribution is reported on a separate Form 1099-R from the 401(k) issued to the corresponding beneficiary.

 

You are responsible for the taxes on the income that you received as beneficiary, reported on the Form 1099-R issued to you.  You are not permitted to transfer your reportable income to anyone else for taxation.  Whatever you gave to your siblings from your distribution are gifts from you to them, potentially reportable on a gift tax return, Form 709.  In situations like this where a beneficiary makes a gift to another from the income, the beneficiary typically makes the gift net of taxes.

1 Replies
Level 15
Apr 13, 2024 9:36:56 AM

There is no "we" when it comes to receiving a single distribution from a 401(k).  Distributions from a 401(k) are paid to individuals, not to groups of individuals.  Each beneficiary of a 401(k) receives their own separate distributions from the 401(k) and each beneficiary's distribution is reported on a separate Form 1099-R from the 401(k) issued to the corresponding beneficiary.

 

You are responsible for the taxes on the income that you received as beneficiary, reported on the Form 1099-R issued to you.  You are not permitted to transfer your reportable income to anyone else for taxation.  Whatever you gave to your siblings from your distribution are gifts from you to them, potentially reportable on a gift tax return, Form 709.  In situations like this where a beneficiary makes a gift to another from the income, the beneficiary typically makes the gift net of taxes.