Level 3

So are you saying it should have been issued to the spouse when she rolled the inherited account over? The 1099-R was issued when the loan was essentially closed and treated as a distribution.  But if the spouse indeed has to pay the tax on the distribution, it is to her benefit to file on amended 1040, as that's where the tax is less. There was a 1099-C issued for a credit card, which I agree with filing on the 1041. 

There aren't any credible deductions to use on the 1040, unless I've overlooked something.  There was no distribution of assets to any beneficiaries, other than the TSP.  And the only deductible fees are the administrative fees for setting up probate, which was required to get two small accounts (less than $1500) transferred to the spouses name.

I really appreciate your input.  Hate these type of scenarios. 

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