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J
JHUMPHCPA13
Level 3
May 3, 2021

Inherited 401k Questions

  • May 3, 2021
  • 1 reply
  • 10 views

The decedent died in 2017 but the estate was not probated until January 2021.  The only asset is a 401k valued at approximately $100,000 (up from approx. 83k at time of death).  There were no distributions and the executor just liquidated the account to distribute to the heirs.  Does a return need to be filed and if so should it be a 1041 or a 706?

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    1 reply

    sjrcpa
    sjrcpa
    Level 15
    May 3, 2021

    Who was named as the IRA beneficiary(ies)?

    Or was no one and therefore it defaulted to the estate?

    Is it IRA or 401(k)?

    The more I know the more I don’t know.
      J
      JHUMPHCPA13Author
      Level 3
      May 3, 2021

      Sorry it's a 401k.  My understanding is he died with no will so the sister is the executor and is distributing it evenly to his surviving children.

      sjrcpa
      sjrcpa
      Level 15
      May 3, 2021

      If that's correct, the distribution went to the estate. Then the estate distributed it. So a 1041 is needed. Hopefully receipt and distribution occurred in same year.

      706 is only needed when the value of the estate exceeded $10 million as indexed as of the date of death. And it would be late.

      The more I know the more I don’t know.
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