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New Member
posted Apr 11, 2023 10:39:33 AM

My sister is getting penalized for not reporting an inheritance in 2020 I also didn’t report it how do I avoid getting penalized

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5 Replies
Expert Alumni
Apr 11, 2023 10:57:01 AM

Many inheritances are nontaxable events, I suspect something was sold after the fact, or an RMD from an IRA wasn't taken.  Please provide some additional details.  You can message me at @JohnB5677.

New Member
Apr 11, 2023 11:27:06 AM

Hi there it took me forever to find the tax form they sent me I hope it attached properly 

New Member
Apr 11, 2023 11:29:26 AM

I don’t think it attached but the form is a 1099-r from a credit union in the amount of $21,380

Expert Alumni
Apr 11, 2023 11:48:51 AM

The inheritance itself is not reportable.

 

But your sister took a distribution from an inherited retirement plan, that's the reason she received that form 1099-R. This distribution is generally taxable and has to be reported on her tax return.

Level 15
Apr 11, 2023 11:52:53 AM

If you got a 1099R with your ssn on it you have to report it on your return.  If it would have been taxable to the deceased it is taxable to you.  Did you file your return yet?

Enter a 1099R under

Federal Taxes Tab or Personal (Home & Business)

Wages & Income at the top

 

Then scroll way down to Retirement Plans and Social Security,

Then IRA, 401(k), Pension Plans (1099R) - click Start or Revisit

 

There are 4 boxes.  Be sure to pick the right box for the kind of 1099R you got.

 

If you are filing a Joint return be sure to pick which person it is for.