AnmarieA
Level 5

Hello Community. I have a client who is the beneficiary of an estate of her deceased Aunt. The assets in the estate are "qualified money" Traditional and Roth IRA. Since the estate was named beneficiary instead of the individual beneficiary is there a place on the K-1 that allows for non taxable income such as the  ROTH IRA and allowing the Traditional IRA to be non taxable as well put into the name of the beneficiary and taken into income over the allowed 5 year period?  This was an estate planning error as the decedent died before the beneficiaries were corrected as qualified money should never name an Estate as the beneficiary. Can anyone provide any suggestion as my client as beneficiary would have to take the entire K-1 distribution as income if there is not a place on the 1041 or K-1 to identify the taxable and non-taxable portion of the distributions. I am not the preparer of the Estate's return but this is what they are telling my client that it will all be taxable which does not make sense to me knowing the nature of the assets. 

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