I inherited accounts from husband. The brokerage firm told me distribution wasn't taxable BUT 1099-R has 2b checked "tax amount not determined." What do I do?

[TomYoung]

Typically distributions out of retirement accounts of any kind ARE taxable unless there's "basis" in the account - in which case some of the distribution would not be taxable - or the distribution is out of a Roth IRA.  Do you know the reasoning behind the brokerage firm's statement?

[macuser_22]

What code is in box 7?
Is the IRA/SEP/SIMPLE box checked?

[tjlawser]

code 4, yes the IRA/S/S box is checked

[tjlawser]

I'm looking at my notes.  I think that, in my grief,  the fact there would be no 10% Penalty for early withdrawal*  from this inherited account, I confused with the tax issue.  Obviously they are quite different issues.  *I am 56 y/o.

[macuser_22]

There is never any early withdrawal penalty on an inherited IRA.   It code 4 should prevent any penalty.

[tjlawser]

Sorry if I wasn't clear. My question was never about the penalty.  It was about whether the inherited funds were taxable after my husband died.  It appears they are.  Thanks.

[fanfare · Accepted solution]

For an IRA it is always "not determined" because the custodian does not know how many other IRAs you might have. if the decedent did not have a basis, it will all be taxable income.