Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

I received a $15,000 distribution from my deceased mothers

I received a $15,000 distribution...
I received a $15,000 distribution from my deceased mother's IRA in 2012. Form 1099R box 1 shows $15,000; box 2a shows $15,000; box 2b the "taxable amount not determined" box is checked. The distribution code is 4, for Death. (I was 59 1/2 when I received this distribution in 2012.)

What percentage of the $15,000 that I received is taxable? How do I include it on my 1040? As income from IRA distributions on item 15a? What would the taxable amount be for item 15b?
Show More
Show Less
Ask Your Own Tax Question
Answered in 3 minutes by:
10/15/2013
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,692
Experience: Taxes, Immigration, Labor Relations
Verified

Lev :

Hi and welcome to our site!
Because that was distribution of inherited IRS due to the death of the original owner - there is no early distribution penalty regardless of your age. That is based on the distribution code reported in box 7.

Lev :

box 2a shows $15,000; box 2b the "taxable amount not determined" box is checked - these reporting are contradicting. In general - the full amount of distribution is considered as taxable unless your mother made any after tax (not deductible) contributions into that IRA account.
If all contributions were deducted - the full amount is taxable.

Customer: Thanks, Lev. I realize there is no penalty for the distribution, but what portion of the $15,000 must I use to calculate my income? That is, do I pay taxes on the entire $15,000 which I must report as additional income?
Customer: OK, thanks, Lev. I didn't wait LNG enough to see the second half of your answer.
Lev :

How do I include it on my 1040? As income from IRA distributions on item 15a? What would the taxable amount be for item 15b?
On form 1040 - you need to report
line 15a - from 1099R box 1
line 15b - from 1099R box 2a
line 62 - from 1099R box 4 - that how the amount of tax withheld is credited!

Customer: Sadly, no tax was withheld, so I'll owe the full amount, based on my own taxation level.
Lev :

What percentage of the $15,000 that I received is taxable?
Based on your information - the total amount is taxable.
Some income received by the estate or beneficiaries AFTER the decedent passed away might be classified as Income in Respect of the Decedent (IRD) - and could be taxable. Examples of IRD include interest and dividends paid to the estate AFTER the date of death, distributions from tax deferred accounts (401k, IRA, annuity, etc), gain from the sale of inherited assets. Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. Income in respect of a decedent realized AFTER the death is taxable the same way as it were taxable for the decedent.
Because you are the beneficiary who received that distribution - it is taxable for you.Your tax liability is not determined separately for each type of income. That distribution is added to your other taxable income - and will be based on your total income, filing status, deductions, etc.

Lev :

I will help you to estimate your possible tax liability if needed.

Customer: No, thanks for your help, but this was the one remaining detail I hadn't yet determined. The rest of my return is very simple, as I am a federal employee ( currently on furlough, thanks to our friends in Congress!), with very basic deductions for mortgage and charitable giving. This issue - the distribution -- was my only question. Thanks for your help. I'm afraid I got the answer I was expecting, but wanted to check with an expert to make sure.
Lev :

Sorry if you expected differently.
You had a choice to spread distribution over several years - but as long as you already received it - it might be too late for planing. But that is not a large additional income - so additional tax liability should not be too large.
Also "our friends in Congress" are helping to avoid higher tax bracket...

Customer: True! Thanks again for your help!
Lev :

You are welcome.
Please be sure to come back for all your tax related issues.

Customer: Oh, Lev, I have one more question!
Lev :

Sure - go ahead

Customer: I was late by a few days in applying for a 6-month extension, and so the IRS denied my request. Obviously, I waited until 10/15 anyway, as is my wont. I presume they'll hit me with a penalty of some sort. Any idea how large it might be? A percentage of my total tax? (I'll owe them about $5,000)
Lev :

As you already late - 10/15 would not be relevant for you.
The penalty is based on the amount of tax you owe. A failure-to-file penalty may apply if you did not file by the tax filing deadline. A failure-to-pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline. The failure-to-file penalty is generally more than the failure-to-pay penalty.

Lev :

The penalty for filing late is normally 5% of the unpaid taxes for each month or part of a month that a tax return is late. That penalty starts accruing the day after the tax filing due date and will not exceed 25% of your unpaid taxes.
So - because you are six month late - your failure-to-file penalty is max 25%.

Customer: Anything I might to to ameliorate the penalty? Write them a letter, begging their forbearance?
Lev :

There will not be any failure-to-pay penalty because of the 25% limit. However - there will be interest charges.


You will not have to pay a penalty if you can show reasonable cause for not filing or paying on time.

Customer: Hmmmmmmmm....... Guess I'll have to make something up!
Lev :

The best path forward might be to ask the IRS to abate penalties, however it would be very unlikely that interest charges are abated. File a form 843 -http://www.irs.gov/pub/irs-pdf/f843.pdf
to request the "accuracy related penalty" be abate based on reasonable cause. If you provide the reason like "I forgot" - I do not think it will be considered as reasonable - so be careful when prepare an abatement request. Because that was not your mistake - but the mistake of your CPA - you have a good chance to provide a reasonable cause.
Here are instructions - http://www.irs.gov/pub/irs-pdf/i843.pdf
If the IRS accepts your reasons as reasonable - and agrees to abate penalties - at least part of the issue would be resolved.

Customer: Great advice! Thanks so much. Fingers crossed.
Lev :

Yes - filing a valid extension could be very helpful,,,

Customer: It's the first time I missed the April 15 deadline. Believe me, I won't be doing THAT again! Once again, thanks for your help.
Lev :

Sorry for your situation. I think you have nothing to loose if apply for abatement - but be careful with your reasons.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,692
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,692
30,692 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
What are the forms for reporting Rental Income to the IRS on
What are the forms for reporting Rental Income to the IRS on foreign properties - we collect each month? Is this filed separately from our personal returns?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,083 satisfied customers
On a NJ W-3 form, is line 3 the NJ Gross income tax withheld
On a NJ W-3 form, is line 3 the NJ Gross income tax withheld or is that supposed to include unemployment tax, FLI, SDI, etc... as well… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Reporting pension and social security income on both Forms
Reporting pension and social security income on both Forms 1040 and 1041? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
What is the deadline for taking min. distributions from my
What is the deadline for taking min. distributions from my Walmark 401K … read more
Lev
Lev
Tax Advisor
30,692 satisfied customers
Is there a form to file with the IRS for tax periods that
Is there a form to file with the IRS for tax periods that have ran past the statute of limitations from the date of assessment … read more
Lev
Lev
Tax Advisor
30,692 satisfied customers
Will my filing of federal taxes by the April deadline be
Will my filing of federal taxes by the April deadline be according to the current set of laws (e.g. unlimited deduction of state and local taxes) or will the new "reformed" tax bill and its new rules … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
Under the new tax plan if my federal adjusted gross income
Under the new tax plan if my federal adjusted gross income is $77,230.00 how much are my federal taxes? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
On line 37 my 2015 Form 1040 I had an adjusted gross income
On line 37 my 2015 Form 1040 I had an adjusted gross income of $291,546. on my Amended 1040X for 2015 I have taxable income of $179,542. How do I get proof of this to get an adjusted MAGI to give to M… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
If my gross income is 30000, not married and no dependents,
If my gross income is 30000, not married and no dependents, can you tell me approximately how much I would expect to pay in federal tax, state tax and SS? … read more
Lev
Lev
Tax Advisor
30,692 satisfied customers
My gross income is $17,105.64. Do I have to file a tax
My gross income is $17,105.64. Do I have to file a tax return? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
Form 1120, cash basis. If Taxes paid to IRS are deductible,
Form 1120, cash basis. If Taxes paid to IRS are deductible, are refunds for overpayment the equivalent of income?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,083 satisfied customers
I filed for an extension to file my 2017 income tax return.
I filed for an extension to file my 2017 income tax return. I recently suffered a stroke - 6 weeks ago - and have been unable to finalize my return. I should be able to file it within the next 30 days… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
How can I get an extension to file federal and state taxes
How can I get an extension to file federal and state taxes for 2016 … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
I filed for federal tax extension and was approved, file
I filed for federal tax extension and was approved, file under married separate, after divorce finalized, in divorce decreed I am to file singe from 2016 forward, so do I have to complete the extensio… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,083 satisfied customers
I filed my Form 1040, prepared on TurboTax and filed
I filed my Form 1040, prepared on TurboTax and filed electronically via TurboTax. I got nothing back and was told by the IRS that the refund was sent to a different bank transit number than the one sh… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
I asked for an Federal Income Tax extension to 10/16/17 and
I asked for an Federal Income Tax extension to 10/16/17 and I paid taxes due. This was for 2016. Am I able to extend it further?… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,282 satisfied customers
What tax form is filed to report dividends paid by US Corp?
What tax form is filed to report dividends paid by a US Corp which is owned by a Canadian Corp? I think it might be 1042S. I want to know the rate of WH.… read more
abci168
abci168
Principal
27 satisfied customers
Same question on the taxation of interest and dividends (on
Same question on the taxation of interest and dividends (on mutual funds) earned inside a disclaimed portion trust ... disclaimer trust . The original owner of a trust passed and the spouse declined a… read more
Lev
Lev
Tax Advisor
30,692 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x