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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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A retirement benefit directed to an estate is being paid as

Customer Question

A retirement benefit directed to an estate is being paid as a lump sum directly to an LLC via a small estate affidavit. What form will the LLC receive - 1099R, other? How is this income reported on the LLC's 1065, Ordinary, Other, ??

I thought this should go to a tax law expert but didn't see that as an option so chose estate law.
Submitted: 4 years ago.
Category: Tax
Expert:  Lev replied 4 years ago.

The form 1099-R will be issued in the name of the deceased or in the name of the estate. Taxable retirement benefits are taxed as ordinary income.

Please be aware that some retirement benefit might be not taxable.

 

The retirement benefit will be taxable for the estate or if the LLC i s a beneficiary of the estate - the administrator of the estate generally may choose to pass tax liability through to the LLC. In this case the schedule K-1 should be issued to the LLC.

 

How the LLC reports taxable income?

Single member LLC is generally disregarded entity and all income will be reported of owner's individual tax return.

The LLC with several members is generally treated as a partnership and files the form 1065, however all taxable income is passed through to members. Each member should receive the form K-1 from partnership reporting pro-rata share of his/her income to be reported on the individual tax return.

 

Let me know if you need any help with reporting.

 

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