estate as beneficiary of ira

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  • Maggie
    Member
    • Dec 2006
    • 37

    #1

    estate as beneficiary of ira

    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
    Last edited by Maggie; 12-02-2009, 05:47 PM. Reason: additional information
  • Kram BergGold
    Senior Member
    • Jun 2006
    • 2112

    #2
    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?

    Comment

    • Maggie
      Member
      • Dec 2006
      • 37

      #3
      additional info

      Thanks. I added the additional information.

      Comment

      • Kram BergGold
        Senior Member
        • Jun 2006
        • 2112

        #4
        Need to back up

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

        Check out this article


        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.

        Comment

        • JG EA
          Senior Member
          • Jul 2005
          • 2176

          #5
          Originally posted by Kram BergGold
          The distributions will be taxed to the benificairy.
          However there is a wrinkle.

          Check out this article


          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.?
          JG

          Comment

          • Kram BergGold
            Senior Member
            • Jun 2006
            • 2112

            #6
            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]

            Comment

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