Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

401k distribution to minor due to death

Highlighted
Level 2

I have a situation I've never  had before and would like some input from other professionals. I have a minor client whom by court order had to take distribution from his deceased mother's 401k plan. He also receives SS due to both parents being deceased. The distribution amount requires we file a return for him, however would he still qualify to be the dependent of his court ordered guardian which is also his grandmother? I am trying to figure the correct and least tax liability way to file for him. Any advice is appreciated, thanks!

Labels (1)
0 Cheers
3 Replies 3
Highlighted
Level 11
Level 11
@jmbillmeyer wrote:

I have a situation I've never  had before and would like some input from other professionals. I have a minor client whom by court order had to take distribution from his deceased mother's 401k plan. He also receives SS due to both parents being deceased. The distribution amount requires we file a return for him, however would he still qualify to be the dependent of his court ordered guardian which is also his grandmother? I am trying to figure the correct and least tax liability way to file for him. Any advice is appreciated, thanks!

 

I would say the grandmother would still qualify claiming the child unless he/she provided more than half of their own support.


https://www.irs.gov/pub/irs-news/fs-05-07.pdf

 

Lol....noticed that this is a 2005 notice. 😮

 

Good guide to what you are asking. 

Highlighted
Level 11

Did either parent die in 2019?  Can he be claimed as a dependent on a decedent's return?

And, as already asked, did he provide more than half of his support in 2019?  If the Social Security and 401k was not banked, it's assumed that it was spent on his support.  

Highlighted
Level 2

Both parents passed prior to 2019. The distribution is held in an account with him as beneficiary. He did not provide more than half of his support, his ss payments have to go into an account also. 

0 Cheers