treatment ira/& roth
Administrator of an non taxable estate for both federal & state
liquidated contents of the IRA face value 126,000 (appraised 123,000)
& Roth 63,000(appraised 61,000)without prior notice to the 6 heirs
of the estate.These assets where buried within the estate assets with
out any description to their identification.
Is it possible to reverse this transaction & treat IRA’s as part of
decedent’s final return in 2012,or if not IRA’s be reported on final
return as income (123,000),Roth non taxable as rates would be lower
in 2012 rather than 2013 treated as 1041 for both federal & state.
Permalink Submitted by Alan - IRA critic on Thu, 2014-03-13 19:51
No. The IRA distributions will be reported on the 1099R under the estate EIN. If the administrator did not exercise due diligence in determining if assets were held in an IRA or not, the beneficiaries may consider litigation against the administrator.
Permalink Submitted by howard goldner on Fri, 2014-03-14 20:19
question-which yr reported date of death or following yr2013?
Permalink Submitted by Alan - IRA critic on Fri, 2014-03-14 20:58
An estate can adopt a fiscal tax year other than a calendar year as long as it is not longer than 12 months. This can extend the date the 1041 is filed and also when income is passed through to beneficiaries. However, the total IRA distribution is still going to trigger a spike in taxable income for the non Roth distribution.