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Arthur L Rubin
Arthur L Rubin, Tax Preparer
Category: Financial Software
Satisfied Customers: 1261
Experience:  22 years of tax preparation experience, including 12 years of using commercial software.
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We have a 1099R from the government for arrears pay for a deceased

Resolved Question:

We have a 1099R from the government for arrears pay for a deceased sister. There is no place to enter this is the final payment to the beneficiary...it is not an annuity...Where do we enter the 1099R so they know it is a final payment?..We have anX in box 2b but isn't asked for in the place we chose to go...XXX
Submitted: 3 years ago.
Category: Financial Software
Expert:  Arthur L Rubin replied 3 years ago.

Arthur L Rubin :

Does this represent a payment made to your sister after her death, or to a beneficiary?

Customer :

To a beneficiary

Arthur L Rubin :

I don't see why you need to indicate it's a final payment, except to recover any remaining cost basis of a pension or annuity.

Customer :

turbo tax asks questions about the future..there is no future it is the final payment..if we stay in the annuity 1099r what will be the consequences...? It is not... an annuity it is arrears retirement pay from the navy. my husband just went somewhere and he is the person entering data..I am reading it to him...There is no place to say he is the beneficiary of arrears pay...not an annuity

Customer :

is there any 1099R selection we can pick that will allow us to fill in 2b?

Arthur L Rubin :

OK, give me a moment to look at the entry screens to determine what needs to be done.

Arthur L Rubin :

I'm afraid this is a tax question, rather than a tax software question, but, if this is a pension (retirement pay), then you need to determine what your sister's remaining basis is, if she contributed to the pension. If she didn't contribute, the whole amount is taxable, whether or not the government knows it.

Arthur L Rubin :

If she did contribute, and the amount she reported as taxable was not the entire amount reported to her, and she didn't recapture that basis on her final tax return, then the remaining basis can be deducted from this check to determine the taxable amount. Unfortunately, you'd need access to her accountant to determine this. I recently started a pension basis deduction calculation for a client, and I know TurboTax doesn't retain the necessary information.

Customer :

This pay was nothing she contributed to..It was her pension. She died mid year and somehow the Navy pays you the year ahead..so this is her retirement pay due her and sent to my husband her beneficiary...it is actual pay ....not an ira or anything like that.

Customer :

We owe taxes on this income and we need to know how to get it onto our turbo tax..we owe on the whole amount

Arthur L Rubin :

If there's no basis, they (the IRS) doesn't need to know it's a final payment; if they come back next year and ask, you can then let the IRS know that it was a final 1099-R.

Arthur L Rubin :

If the payee on the 1099-R is year sister, some more work needs to be done, but otherwise just report it as a pension, if asked. Box 2a (which TurboTax asks you for, twice) is the same as Box 1. You can try checking the "Total Distribution" box, so that TurboTax won't ask you about it next year, but that could get you in trouble if it actually gets reported to the IRS and it wasn't checked on the actual 1099-R.

Customer :

so where do we enter this 1099r info onturbo tax?

Customer :

the actual payee is my husband so we will report it as an actual pension cheking box 2 b and 4 in box 7...do you agree with that?...there are no other boxes besides 1 and 2 checked

Arthur L Rubin :

The same place you would enter any 1099-R; in my version you select the "Personal" tab at the top, subtab "Personal Income"; select "Explore on your own", and go down to "IRA, 401(k), Pension Plans (1099-R)" under Retirement Plans and Social Security.

Arthur L Rubin :

Yes, I agree. Report as an actual pension.

Arthur L Rubin, Tax Preparer
Satisfied Customers: 1261
Experience: 22 years of tax preparation experience, including 12 years of using commercial software.
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