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dellm1222
New Member

Is the inherited pension money taxable?

 
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5 Replies
bwa
Alumni
Alumni

Is the inherited pension money taxable?

An inheritance, except for a deferred plan such as a 401k or IRA, is not taxable and is not reported on your tax return.

Income earned on inherited assets after you receive them is taxable. For example, if you inherit stocks and subsequently earn dividends on the stock, the dividend income would be taxable to you.


LinaJ2018
Intuit Alumni

Is the inherited pension money taxable?

Edited.  2/133/2016 6:26PM

In general, inherited retirement plans are not taxable until you take a distribution.  

1.  Distributions from an inherited traditional IRA are taxable, just as they are for non-inherited traditional IRAs.                  Distributions from an inherited Roth are not taxable unless the Roth was established within the past 5 years.

2.  Inherited 401(k) plans are (or eventually will be) taxable but the amount of tax depends on the 401(k) plan rules.

For example, many 401(k) plans require a lump-sum distribution upon the death of the account holder. The surviving spouse can roll the 401(k) into an IRA, but if the beneficiary is not a spouse, s/he might be forced to take a lump-sum payment and the tax bill that goes along with it.

When it comes to inherited IRAs and other retirement plans, the rules can get pretty complicated.  When you enter your inherited IRA or retirement plan in TurboTax, we'll ask a series of questions to determine how much, if any, is taxable on this year's return.

Is the inherited pension money taxable?

Re: I inherited stocks. Sold some last year. What is my tax basis ?

Is the inherited pension money taxable?

I received a 1099-R for a onetime payment from my step dad's union. It was not pretaxed income.   It is in my name with my ssn. Do I claim and if so where

DianeW777
Expert Alumni

Is the inherited pension money taxable?

 Yes, you claim the income by entering your Form 1099-R.  This is a taxable transaction for a beneficiary.

 

Here's how to enter your 1099-R in TurboTax:

  1. Open (continue) return if you don't already have it open.
  2. Inside TurboTax, search for 1099-R  > press enter and select the Jump to link in the search results. (be sure to use the dash)
  3. Answer Yes on the Your 1099-R screen, then select Continue.
    • If you land on the Your 1099-R Entries screen instead, select Add Another 1099-R.
  4. Select how you want to enter your 1099-R (import or type it in yourself) and then follow the instructions.
  5. Alternately, you can go to Wages & Income > IRA, 401(k), Pension Plan Withdrawals (1099-R) > Edit/Add
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