8915-f and death in 2021.

[chantelsoutham]

I have a client who's husband passed away in 2021. They self prepared. In reviewing the 2020 return, I see a 8915-e. They elected to pay tax 1/3 each year in 2020, 2021, 2022. I am struggling to find where to put it on the 8915-f so it would show the 1/3 taxable in 2021. But then my question is since it was the taxpayer's distribution, does that trigger the final 2/3 ($66k) as taxable in 2021 as this is his final 2021 return? Or is this something that the spouse can inherit and pay the tax in 2022? Or we could amend 2020 and elect to pay tax fully on 2020 instead if it triggers the full amount left due in 2021. I appreciate any assistance. We're almost done with tax season 2021!

[qbteachmt · Accepted solution]

Yes, death triggers all the rest in 2021. I don't know why you would amend 2020 to do that, as well as end up with late fee/penalty. And this is not inherited; it's money they already got.

Read the Form 5329 instructions.

[chantelsoutham]

The reason I would amend as they have HUGE income in 2021 as they pulled more money out of retirement and I think adding another $66k would be in a higher income tax bracket. But will do the calculations and see how to plans out. Thank you for your response. I did think it was all taxable in 2021 and thanks for confirming my thought.