Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
As a non-spouse beneficiary, you do not have the option of rolling the proceeds over into another qualified plan or an IRA, and hence, the proceeds will be taxable to you when received. There will not be a "10% excise tax" applicable in this situation (as a result of the distribution being on account of death), but there will be normal income taxes. The timing of the distribution (and hence of the tax consequences) is a different matter, and to some extent depends on the amount, and other factors involved. If the amount of the distribution is under $5,000, the plan sponsor can force you to take a distribution immediately, otherwise, you may have some options to defer the distribution for a certain period. Check back with the plan sponsor and the administrator, and then talk to a tax advisor - the rules can be confusingly complex, and are probably beyond the scope of this board.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.