Estate receipt of a taxable pension

[JimDu]

I am the executor of an estate that has a pension payment coming in. The will states that the assets of the estate are to be split between 3 beneficiaries equally. Will the estate pay a tax on the receipt of the tax deferred pension or is it passed on to the 3 beneficiaries? if that is the case, how is the pension reported to IRS?

Jim

[dmertz]

Taxable income to the estate is usually passed through to estate beneficiaries on Schedules K-1 for inclusion and taxation on the beneficiaries' tax returns.  This is done by the estate filing an estate income tax return Form 1041.  In doing so, the estate takes a deduction for this Distributable Net Income so that the estate is not taxed on this income.

[JimDu]

The beneficiaries of the will are not on the pension policy.