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VA death benefit proceeds. Trust received the funds after…

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VA death benefit proceeds. Trust...
VA death benefit proceeds. Trust received the funds after death. The amount was about 23k and the only funds received in 2016 and income of interest of $ .25. Must a 1041 be filed? DOD 4/2016...proceeds received 11/2016.
Submitted: 7 months ago.Category: Finance
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Answered in 10 minutes by:
12/14/2017
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 7 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,619
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi. My name's Lane.

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents, since 1986

When you say Death Benefit ... Do you mean Survivor's pension? This is much larger than any normal burial benefit and even larger than a survivors pension unless there were possibly more than one dependent ... or this was some sort of retroactive payment ... and many of these benefits are tax free.

See this from IRS:

...

As a veteran, you can exclude from income any VA benefits you receive–like benefits paid under any law, regulation, or administrative practice by the VA. Some examples of VA benefits include:

  • Education, training, and subsistence allowances.
  • Disability compensation and pension payments for disabilities paid either to veterans or their families.
  • Grants for homes designed for wheelchair living.
  • Grants for motor vehicles for veterans who lost their sight or the use of their limbs.
  • Veterans’ insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran’s endowment policy paid before death.
  • Interest on insurance dividends left on deposit with the VA.
  • Benefits under a dependent-care assistance program.
  • The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001.
  • Payments made under the compensated work therapy program.
  • Any bonus payment by a state or political subdivision because of service in a combat zone.

Can you be more specific?

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