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Level 2

Solved

1099-R Beneficiary versus Inheritance

4 replies
63 views

Big difference in the approach. Mom passed in 2021 and my brother and I were beneficiaries of an account. Disbursement were made directly to each of us and we each withheld taxes.
Q: As beneficiaries, is it inheritance? Is there a difference in terminology to the IRS?
If I put "yes" to the "inheritance" question, it asks who died and when and the taxes apply. If I put no, because I was deemed a beneficiary, the taxes do not apply.

Anybody?
TIA

Alumni - Intuit

There is a difference between beneficiary and inheritance.

You inherit from your spouse and you are the beneficiary if it is from a non-spouse

"...1099-R inheritance tax treatment depends on whether it was inherited from a spouse or not. ... If you inherited a traditional IRA from your spouse, you have a choice to treat it as your own or treat yourself as a beneficiary. When the 1099-R is from a non-spouse, you don't have that choice." Ref: ttlc,Intuit.com

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Level 15

a 1099-R means it was a tax-deferred account, and on that type of inheritance, you have to pay the tax that the owner would have paid.

prussian11Author

Level 2

Thank you.

I suspected as much, but had to ask.

Most appreciated.

Alumni - Intuit

There is a difference between beneficiary and inheritance.

You inherit from your spouse and you are the beneficiary if it is from a non-spouse

"...1099-R inheritance tax treatment depends on whether it was inherited from a spouse or not. ... If you inherited a traditional IRA from your spouse, you have a choice to treat it as your own or treat yourself as a beneficiary. When the 1099-R is from a non-spouse, you don't have that choice." Ref: ttlc,Intuit.com

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"