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Why not? See the section on "Rollovers by nonspouse beneficiary" on page 28.

Because of the type of payment. As I read the list of payments that can be rolled over, it's payments made to the beneficiary instead of to the employee. A death benefit would never be paid to an employee.

Ah. You chose to focus on "death benefit" whereas I assumed that was just imprecise use of language which has a precise meaning within the tax code. Instead I looked at the end of the same sentence in the original post - "It said that the death benefit will be taxable income, unless I do a direct roll-over into an inherited IRA." (emphasis added).

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