I entered a 1099R for a distribution from a deceased relative. TT then asked about the birthdate of the deceased for information about Required Minimum Distributions. Then the questions continued about distributions, but refer to me as the recipient. I was never a recipient previously and do not know how the deceased person handled them. How am I to proceed through these questions? Did I fail to mark something earlier? I went back and check my work and confirmed I have "4" entered in box 7 indicating it is a death payment. Thanks for any help.
When you inherit an IRA, some of the requirements that applied to the decedent apply to you as the beneficiary. TurboTax asks questions about the decedent and the plan so that you report it correctly so you do not under- or over- pay the tax.
Beneficiaries of retirement plan and IRA accounts after the death of the account owner are subject to required minimum distribution (RMD) rules. A beneficiary is generally any person or entity the account owner chooses to receive the benefits of a retirement account or an IRA after they die. The owner must designate the beneficiary under procedures established by the plan. Some retirement plans require specific beneficiaries under the terms of the plan (such as a spouse or child).
Beneficiaries of an IRA, and most plans, have the option of taking a lump-sum distribution of the inherited account at any time. Beneficiaries must include any taxable distributions they receive in their gross income.
Thank you, but why is TT treating me as the deceased. It is asking me about disbursements and how they are calculated. I have never received anything previously. The account money was distributed to me and two other beneficiaries, and then the account closed. Taxes were taken out upon distribution. This is not a roll over and there is no RMD to discuss with me as a beneficiary.
It asks about the RMD information (Birthdate) to make sure no penalties apply.
A Form 1099-R indicating your distribution as a “death distribution” – code 4 in box 7 should have been issued. Enter this form in the Wages and Income section, and you will be asked additional questions about the decedent.
Such as: if the decedent made any nondeductible contributions. This is important because nondeductible contributions are treated as return of investment and are not taxable; it may be beneficial for you to find out (often your plan administrator, broker or banker has this information or form 8606 from prior years' tax return should indicate that information ). You will also be asked if the original owner of the IRA passed away after he/she was 70 ½, did he/she take required Minimum Distribution (RMD) in the year of death. Again, your plan administrator should know and you should as well…if the RMD was not taken, a 50% penalty on not distributed amount may be applied. It's asking to make sure none of these situations apply. These things are not on your Form 1099-R, so the program needs to know.
TurboTax takes all of this information and properly applies the tax laws and enters it onto your tax return as required.
Click here for additional information on inherited IRA's.
Click here for additional tax information on inheritance.
when you get a 1099-R code 4, DO NOT enter any information about a deceased taxpayer (someone else or yourself) in the MY INFO section.
Go back there and clear out whatever you put in there.
Does the lump sum distribution count as the RMD (or make an RMD unnecessary)? My mother died in 2023, but i received the lump sum distribution from her annuity in 2024. I contacted the plan administrator, but they dont have any RMD information for 2024 since the plan was closed out. I did not rollover the distribution, just took the lump sum and i am unsure of what to put for the RMD for 2024.
Since neither the IRS nor TurboTax knows what your RMD should be (and apparently not your plan administrator), if you're asked for an RMD amount, try entering $0.
If you later get an error (or a penalty for not taking your RMD), then enter an amount equal to or less than the distribution.
Here's more info on Inherited Total IRA Distribution and a detailed article on Inherited IRA's.