401K beneficiary distribution

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Subject Author Date 401K beneficiary distribution Secretagentman 04-11-2007  Re: 401K beneficiary distribution joetaxpayer 04-12-2007  Re: 401K beneficiary distribution Stuart A. Bronstein 04-12-2007
Posted by Secretagentman on April 11, 2007, 11:28 pm Please log in for more thread options My dad recently passed away and my sister and I were 10% each beneficiaries on his 401K while 80% was to go to my mother. Well she passed a month later and my sister and I are both to receive 50% of her estate which will include the 80% of the 401K. My question is what will the taxes be on this type of payout is this part of the estate? I live in NJ if that matters. << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ------------------------------------------------------- >> Posted by joetaxpayer on April 12, 2007, 6:13 pm Please log in for more thread options Secretagentman wrote: > My dad recently passed away and my sister and I were 10% > each beneficiaries on his 401K while 80% was to go to my > mother. Well she passed a month later and my sister and I > are both to receive 50% of her estate which will include the > 80% of the 401K. My question is what will the taxes be on > this type of payout is this part of the estate? I live in NJ > if that matters. I am sorry for your loss. Is 'recently' this year, 2007? If so, you may be able to roll it over to your own IRAs. This story at Smart Money.com gives the details of the new rules; http://www.smartmoney.com/taxmatters/index.cfm?story=20060821 The rules are specific, be careful, if the money is sent to you instead of the new IRA custodian, it's deemed a distribution. The rules surrounding this are complex, and most mistakes are un-doable, so be sure of what your next step is. Yes, it's part of your mother's estate. JOE << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Stuart A. Bronstein on April 12, 2007, 6:13 pm Please log in for more thread options > My dad recently passed away and my sister and I were 10% > each beneficiaries on his 401K while 80% was to go to my > mother. Well she passed a month later and my sister and I > are both to receive 50% of her estate which will include the > 80% of the 401K. My question is what will the taxes be on > this type of payout is this part of the estate? I live in NJ > if that matters. First there are income taxes on those funds because they hadn't been subject to tax in the past. Then if your mother's estate is greater than $2,000,000 (assuming she died in 2006 or 2007) the excess will be subject to estate tax. Stu << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Similar Threads Posted Tax implications of 401k and IRA to beneficiary February 4, 2009, 1:59 pm non-spouse beneficiary 401k rollover to inherited IRA February 10, 2007, 6:43 am Question on 401K Distribution October 19, 2007, 10:20 pm 401k distribution..Local tax owed? February 17, 2008, 5:10 pm Return of a portion of the 401k corrective distribution November 21, 2007, 1:55 am Lump sum distribution from the 401k plan - Questions January 4, 2009, 8:19 pm Re: Are Employer Plans REQUIRED to perform 401k to Roth IRA Distribution if Requested? April 21, 2008, 9:46 pm Re: Are Employer Plans REQUIRED to perform 401k to Roth IRA Distribution if Requested? April 23, 2008, 10:37 am Re: Are Employer Plans REQUIRED to perform 401k to Roth IRA Distribution if Requested? May 2, 2008, 10:53 pm Solo 401K (aka Individual 401K) same as Super-Simplified 401K? December 3, 2007, 12:49 am