estate as beneficiary of ira

[Maggie]

TP died 3/11/09. Ira's $100,000 and TSA $160,000 listed estate as beneficiary. Other interest and dividends earned in the estate in the amount of $2,500. Stock losses in the amount of $10,000. Distributions were made to beneficiaries 9/1/09 $364,000. Total value of estate $650,000. Expenses of $30,000. Will the ira's, tsa, interest/dividends, be taxable to the estate (1041) or taxable to the beneficiaries? Estate will likely be finalized before it's year end of 2/28/10.
Thank You

[Kram BergGold]

More details

You need to provide income, deduction, and distribution info for nayojne to help you. Also is the estate on a claendar or fiscal year?

[Maggie]

additional info

Thanks. I added the additional information.

[Kram BergGold]

Need to back up

The distributions will be taxed to the benificairy.
However there is a wrinkle.

Check out this article

http://www.retirement-income.net/ira-beneficiary-estate.htm

So the first key is how was the IRA and TSA money distributed. If it was just flat out distributed then it is taxed to the benificiary in full . If it was retitled as a benificiary IRA then it would be taxed to the bemificairy but maybe over a longet number of years per the article.

[JG EA]

The distributions will be taxed to the benificairy.
However there is a wrinkle.

Check out this article

http://www.retirement-income.net/ira-beneficiary-estate.htm

So the first key is how was the IRA and TSA money distributed. If it was just flat out distributed then it is taxed to the benificiary in full . If it was retitled as a benificiary IRA then it would be taxed to the bemificairy but maybe over a longet number of years per the article.

Thank you for this article. I was trying to find where I read about this to refresh my facts on it. But I am still confused by it. Can you look and see if I have this right:

If a spouse Then can treat as own IRA.

If no beneficiary (or estate as beneficiary)
Under 70.5 death: Must be drained within 5 years.
Over 70.5 death: Can continue over the remaining life of IRA owner. (longest possible 15.3 years. Reduction in years as the age of the owner is past 71 at death.)

If a beneficiary (person named)
Then that person can distribute over their life expectancy.

Assuming retitled and not distributed as you said. Are beneficiaries of an estate usually given a choice and asked if they want it over 5 years, etc.?

[Kram BergGold]

You are right

You have it right.
I should hope the executor or trix o fthe estate would review the options iwth the beni.


QUOTE=JG EA;89524]Thank you for this article. I was trying to find where I read about this to refresh my facts on it. But I am still confused by it. Can you look and see if I have this right:

If a spouse Then can treat as own IRA.

If no beneficiary (or estate as beneficiary)
Under 70.5 death: Must be drained within 5 years.
Over 70.5 death: Can continue over the remaining life of IRA owner. (longest possible 15.3 years. Reduction in years as the age of the owner is past 71 at death.)

If a beneficiary (person named)
Then that person can distribute over their life expectancy.

Assuming retitled and not distributed as you said. Are beneficiaries of an estate usually given a choice and asked if they want it over 5 years, etc.?[/QUOTE]