Have a Tax Question? Ask a Tax Expert
Hi. My name is ***** ***** I will be happy to help you.
The distribution will be taxable but she will not be subject to the early distribution penalty. She has couple of options to take it. She can roll it over into her own retirement plan or IRA or she can take lump sum distribution. She has 5 years to deplete the account, which means she doesn't have to take the entire amount in a single year. But if she choose to do so, the entire amount will be taxable in the year the distribution is made. Income averaging is not an option.
Harry, I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.