Here's one I thought I knew the answer to, but can't find anywhere.
A dies leaving a 401-K. If the money from that plan isn't distributed until after the first tax year of the estate, when is the money taxed? Is it taxed in the estate as of the date of death, or only when it's taken out of the qualified plan?
Thanks.
Taxed for Estate Tax purposes on date of death (or alternative valuation date). Taxed for income tax purposes when distributed from plan.
Ira Smilovitz, EA
Thanks, Ira.
Don't forget the possible IRD tax credit for Estate Taxes paid.
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