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There is NO double taxation
If distributed to the estate - that income
will be reported for the estate - and will be passed to beneficiaries on K1 forms
- so each beneficiary will include that income on his/her individual
income tax return
is reported directly to each beneficiary - no need to report that amount on the estate tax
Specifically we need to determine which income would be taxable.
Distribution form 401k will be treated as IRD - income in respect of the decedent - and will be reported as taxable on form 1099R.
Distribution from the annuity might be partly taxable - means - original after tax contributions are distributed tax free - and earnings will be taxable. Both total distribution and taxable part will be reported on form 1099R.
Life insurance proceed paid because of the death of the insured person - is not taxable income
Regarding "up front" taxes - that is NOT actual tax liability
- but withholding
to cover possible tax liability.
The actual tax liability is calculated on the tax return -based on total income, filing
Withholding made at the time of payment - will be also reported on form 1099R - and will be CREDITED toward the tax liability.
That is similar to withholding from wages.
So - no double taxation - and if withholding is more than your tax liability - you would be getting a refund.
Let me know if that answered your question.
Let me know if you need any help with reporting