Tax Treatment Of Inherited Local Gov't Deferred Comp Account

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GmanJeff
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Joined: Sun Jun 11, 2017 7:12 am

Tax Treatment Of Inherited Local Gov't Deferred Comp Account

Post by GmanJeff »

I'd welcome insights into this with respect to an account with named individual non-spousal family member beneficiaries. That is, does the account get retitled into the names of the beneficiaries, who then take RMDs, perhaps over a maximum of 10 years? Or does the Plan Administrator distribute the accounts to the beneficiaries in full, issuing them 1099-MISC forms so that the distribution is all taxable in one year? Does it depend on Plan terms (which I have yet to be able to access)?
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retired@50
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Re: Tax Treatment Of Inherited Local Gov't Deferred Comp Account

Post by retired@50 »

GmanJeff wrote: Sun Feb 11, 2024 11:41 am ... Does it depend on Plan terms (which I have yet to be able to access)?
This ^^^ seems most likely to me.

Are the plan terms a secret for some reason? Seems peculiar.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Alan S.
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Re: Tax Treatment Of Inherited Local Gov't Deferred Comp Account

Post by Alan S. »

GmanJeff wrote: Sun Feb 11, 2024 11:41 am I'd welcome insights into this with respect to an account with named individual non-spousal family member beneficiaries. That is, does the account get retitled into the names of the beneficiaries, who then take RMDs, perhaps over a maximum of 10 years? Or does the Plan Administrator distribute the accounts to the beneficiaries in full, issuing them 1099-MISC forms so that the distribution is all taxable in one year? Does it depend on Plan terms (which I have yet to be able to access)?
The tax code allows direct rollovers from govt 457b plans to inherited IRA accounts of designated beneficiaries but does NOT require that the plan provide them. The plan should be contacted to determine what the options are for either direct rollovers, or for distributions directly to the beneficiaries from the plan. Of course, an undesirable total distribution is also possible.
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