Received a 1099-r for deceased fIL. Wasn't an IRA, life Insurance, or annuity. Called Company and they said was a taxable "Death Benefit". Only distribution code is 4

[KatFen5]

Turbo tax deluxe is treating it as an IRA distribution.  I'm thinking there should be another code in box 7 that explains that this is NOT an IRA distribution.  Father-in-law worked for Armoco Steel Union.  Can someone explain why a "Death Benefit" would be taxable?

[MinhT1]

Code 4 (Death) in box 7 of form 1099-R means that the distribution is from an inherited account after the death of its previous owner. This is not a death benefit from a life insurance policy.

If the box IRA/SEP/SIMPLE next to box 7 is check then it is an IRA. Otherwise it is not.

This distribution is taxable and you have to enter the form 1099-R in your tax return.

[KatFen5]

It wasn't an account.  I called them and ask if it was life Insurance, an IRA, Annuity or money he had contributed, they said it was a "death benefit paid out to beneficiary's upon death" (I'm assuming it was a Union benefit of some sort).  Armco Steel had a settlement with AK Steel back in 2011, would this make a difference?

[ColeenD3]

It also may have been a deferred compensation plan. This is taxable income.

A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts.

• Elective salary deferrals are excluded from the employee’s taxable income (except for designated Roth deferrals).
• Employers can contribute to employees’ accounts.
• Distributions, including earnings, are includible in taxable income at retirement (except for qualified distributions of designated Roth accounts).

[KatFen5]

The IRA box is not checked, yet turbo tax is asking if this is an RMD.  It is not an RMD because it's not an IRA.  So how do I answer all the questions that come after it, because the questions are assuming that this is an IRA?  It's asking when this person was born, than it asks me what did I do with the money, did I move it to another retirement account?  If it's not an IRA, why is turbo tax asking if I moved it to another retirement account?

[ThomasM125]

The required minimum distribution (RMD) rules apply to profit sharing and defined contribution plans, 401(k), 403(b), and 457(b) plans, in addition to IRA plans. So, just because the plan was not an IRA does not mean the RMD rules don't affect it's taxability. You will need to answer the questions in TurboTax to determine the correct treatment of the distribution. Even if it is not an IRA, TurboTax needs to know if you moved it to another retirement account to determine it's taxability. For instance, you can move a 401(k) distribution to an IRA account to avoid taxation on it in certain circumstances.