Distributions from 401k plan are taxable.
That is regardless of how you use the money.
That is up to you if you want to gift the money - but you will not DEDUCT the gift to any specific person. Only gifts to qualified charities are deductible.
When you contributed funds into 401k - such contributions were excluded from taxable income
- correct? That means - your tax liability were deferred until funds are distributed. So when eventually you are taking distributions - the distributed amount is reported as your taxable income.
We may estimate your possible tax liability which is based on following:
your filing status? - single? HOH? other?
do you have any dependents?
your annual social security benefits?
any other taxable income?
Please provide above information - and I will estimate your possible tax liability.