<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=us-ascii">
<meta name="Generator" content="Microsoft Word 15 (filtered medium)">
<!--[if !mso]><style>v\:* {behavior:url(#default#VML);}
o\:* {behavior:url(#default#VML);}
w\:* {behavior:url(#default#VML);}
.shape {behavior:url(#default#VML);}
</style><![endif]--><style><!--
/* Font Definitions */
@font-face
{font-family:Wingdings;
panose-1:5 0 0 0 0 0 0 0 0 0;}
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Tahoma;
panose-1:2 11 6 4 3 5 4 4 2 4;}
@font-face
{font-family:"Open Sans";}
@font-face
{font-family:"PT Sans Narrow";}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
font-size:11.0pt;
font-family:"Calibri",sans-serif;}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
p.xmsonormal, li.xmsonormal, div.xmsonormal
{mso-style-name:x_msonormal;
margin:0in;
font-size:11.0pt;
font-family:"Calibri",sans-serif;}
span.EmailStyle21
{mso-style-type:personal-reply;
font-family:"Calibri",sans-serif;
color:windowtext;}
.MsoChpDefault
{mso-style-type:export-only;
font-size:10.0pt;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
/* List Definitions */
@list l0
{mso-list-id:1117944641;
mso-list-template-ids:2073167498;}
@list l0:level1
{mso-level-number-format:bullet;
mso-level-text:\F0B7;
mso-level-tab-stop:.5in;
mso-level-number-position:left;
text-indent:-.25in;
mso-ansi-font-size:10.0pt;
font-family:Symbol;}
@list l0:level2
{mso-level-number-format:bullet;
mso-level-text:o;
mso-level-tab-stop:1.0in;
mso-level-number-position:left;
text-indent:-.25in;
mso-ansi-font-size:10.0pt;
font-family:"Courier New";
mso-bidi-font-family:"Times New Roman";}
@list l0:level3
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:1.5in;
mso-level-number-position:left;
text-indent:-.25in;
mso-ansi-font-size:10.0pt;
font-family:Wingdings;}
@list l0:level4
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:2.0in;
mso-level-number-position:left;
text-indent:-.25in;
mso-ansi-font-size:10.0pt;
font-family:Wingdings;}
@list l0:level5
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:2.5in;
mso-level-number-position:left;
text-indent:-.25in;
mso-ansi-font-size:10.0pt;
font-family:Wingdings;}
@list l0:level6
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:3.0in;
mso-level-number-position:left;
text-indent:-.25in;
mso-ansi-font-size:10.0pt;
font-family:Wingdings;}
@list l0:level7
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:3.5in;
mso-level-number-position:left;
text-indent:-.25in;
mso-ansi-font-size:10.0pt;
font-family:Wingdings;}
@list l0:level8
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:4.0in;
mso-level-number-position:left;
text-indent:-.25in;
mso-ansi-font-size:10.0pt;
font-family:Wingdings;}
@list l0:level9
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:4.5in;
mso-level-number-position:left;
text-indent:-.25in;
mso-ansi-font-size:10.0pt;
font-family:Wingdings;}
ol
{margin-bottom:0in;}
ul
{margin-bottom:0in;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</head>
<body lang="EN-US" link="blue" vlink="purple" style="word-wrap:break-word">
<div class="WordSection1">
<p class="MsoNormal">Consider this from Ed Slott’s forum:<o:p></o:p></p>
<p class="MsoNormal">dlm<o:p></o:p></p>
<div style="mso-element:para-border-div;border:none;border-bottom:solid #EEEEEE 1.0pt;padding:0in 0in 7.0pt 0in;background:white">
<p class="MsoNormal" style="mso-margin-top-alt:30.0pt;margin-right:0in;margin-bottom:15.0pt;margin-left:0in;background:white;border:none;padding:0in">
<b><span style="font-size:27.0pt;font-family:"PT Sans Narrow",sans-serif;color:#C4B040;text-transform:uppercase">TAXATION OF IRA DISTRIBUTED TO AN ESTATE<o:p></o:p></span></b></p>
</div>
<p class="MsoNormal" style="background:white"><i><span style="font-size:12.0pt;font-family:"Open Sans",sans-serif;color:#777777">Submitted by dzaharako on Sun, 2018-09-23 09:48</span></i><span style="font-size:12.0pt;font-family:"Open Sans",sans-serif;color:#545454"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><b><span style="font-size:12.0pt;font-family:"Open Sans",sans-serif;color:#545454">Forums: <o:p></o:p></span></b></p>
<p class="MsoNormal" style="background:white"><span style="font-size:12.0pt;font-family:"Open Sans",sans-serif;color:#545454"><a href="https://www.irahelp.com/forums/ira-discussion-forum"><span style="color:#C4B040">IRA Discussion Forum</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-size:12.0pt;font-family:"Open Sans",sans-serif;color:#545454">If an estate is named Beneficiary of an IRA and the estate receives the lump sum distribution, can the estate pay the income tax rather
than passing it through to the estate beneficiaries that ultimately receive the cash?<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;margin-left:32.25pt;text-indent:-.25in;mso-list:l0 level1 lfo1;background:white">
<![if !supportLists]><span style="font-size:10.0pt;font-family:Symbol;color:#545454"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:12.0pt;font-family:"Open Sans",sans-serif;color:#545454"><a href="https://www.irahelp.com/user/login?destination=node/33414%23comment-form"><span style="color:#C4B040">Log in</span></a> or <a href="https://www.irahelp.com/user/register?destination=node/33414%23comment-form"><span style="color:#C4B040">register</span></a> to
post comments<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:15.0pt;margin-right:0in;margin-bottom:7.5pt;margin-left:0in;background:white">
<b><span style="font-size:18.0pt;font-family:"Open Sans",sans-serif;color:#C4B040;text-transform:uppercase"><a href="https://www.irahelp.com/comment/57764#comment-57764"><span style="color:#C4B040">THE ONLY WAY THAT THE ESTATE</span></a><o:p></o:p></span></b></p>
<p class="MsoNormal" style="background:white"><i><span style="font-size:12.0pt;font-family:"Open Sans",sans-serif;color:#777777"><a href="https://www.irahelp.com/comment/57764#comment-57764"><span style="color:#C4B040">Permalink</span></a> Submitted by DMx on
Sun, 2018-09-23 11:22<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background:white"><span style="font-size:12.0pt;font-family:"Open Sans",sans-serif;color:#545454">The only way that the estate can incur the tax liability is if the estate is permitted to retain the income and does not pay it out
to the estate beneficiaries in the tax year in which it was received by the estate. If the estate pays it out of the estate to the estate beneficiaries during the estate tax year it was received it is Distributable Net Income that must be taken as a DNI deduction
on the estate tax return and reported to the beneficiaries on Schedules K-1 (Form 1041) for inclusion on the beneficiaries' individual tax returns for the year that includes the end date of the estate tax year.<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>Jeff@bellanddavispllc.com<br>
<b>Sent:</b> Thursday, October 27, 2022 1:42 PM<br>
<b>To:</b> 'WSBA Probate & Trust Listserv' <wsbapt@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [WSBAPT] IRA Payable to Estate - PR"s authority to distribute in kind or cash and distribute cash (with K-1)<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">I have been in contact with the CPA, who is waiting for the decision. There are 18 people sharing in this and the CPA is wondering how many K-1’s must be prepared.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<p class="MsoNormal"><b><span style="font-family:"Tahoma",sans-serif">W. Jeff Davis<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">BELL & DAVIS PLLC<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">Attorneys at Law</span></b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black"><br>
P.O. Box 510<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">720 E. Washington Street, Suite 105<br>
Sequim WA 98382<br>
Phone: (360) 683.1129 <br>
Fax: (360) 683.1258 <br>
email: </span><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif"><a href="mailto:jeff@bellanddavispllc.com"><span style="color:#0563C1">jeff@bellanddavispllc.com</span></a><span style="color:black"><br>
</span></span><a href="http://www.bellanddavispllc.com/" target="_blank"><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif">www.bellanddavispllc.com</span></a><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black"><br>
<br>
The information contained in this e-mail message may be privileged, confidential, and protected from disclosure. If you are not the intended recipient, any dissemination, distribution, or copying is strictly prohibited. If you think that you have received this
e-mail message in error, please e-mail the sender at </span><a href="mailto:info@bellanddavispllc.com"><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif">info@bellanddavispllc.com</span></a><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">
or call 360.683.1129.</span><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif"><o:p></o:p></span></p>
<p class="MsoNormal"><b><o:p> </o:p></b></p>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">
wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b><a href="mailto:Jeff@bellanddavispllc.com">Jeff@bellanddavispllc.com</a><br>
<b>Sent:</b> Thursday, October 27, 2022 1:39 PM<br>
<b>To:</b> 'WSBA Probate & Trust Listserv' <<a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBAPT] IRA Payable to Estate - PR"s authority to distribute in kind or cash and distribute cash (with K-1)<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">We confirmed the estate is the beneficiary. Its around a million dollars. The percentages are between 3% - 7% with one getting 20%. One thing, also, is most of these beneficiaries, themselves, are elderly.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Jeff<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<p class="MsoNormal"><b><span style="font-family:"Tahoma",sans-serif">W. Jeff Davis<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">BELL & DAVIS PLLC<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">Attorneys at Law</span></b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black"><br>
P.O. Box 510<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">720 E. Washington Street, Suite 105<br>
Sequim WA 98382<br>
Phone: (360) 683.1129 <br>
Fax: (360) 683.1258 <br>
email: </span><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif"><a href="mailto:jeff@bellanddavispllc.com"><span style="color:#0563C1">jeff@bellanddavispllc.com</span></a><span style="color:black"><br>
</span></span><a href="http://www.bellanddavispllc.com/" target="_blank"><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif">www.bellanddavispllc.com</span></a><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black"><br>
<br>
The information contained in this e-mail message may be privileged, confidential, and protected from disclosure. If you are not the intended recipient, any dissemination, distribution, or copying is strictly prohibited. If you think that you have received this
e-mail message in error, please e-mail the sender at </span><a href="mailto:info@bellanddavispllc.com"><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif">info@bellanddavispllc.com</span></a><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">
or call 360.683.1129.</span><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif"><o:p></o:p></span></p>
<p class="MsoNormal"><b><o:p> </o:p></b></p>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">
wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Philip N. Jones<br>
<b>Sent:</b> Thursday, October 27, 2022 1:19 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <<a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBAPT] IRA Payable to Estate - PR"s authority to distribute in kind or cash and distribute cash (with K-1)<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<div>
<div>
<div>
<p class="MsoNormal">These are excellent questions. I believe that there is no right or wrong answer. It might depend in part on the size of the IRA. If the IRA is relatively small, it might not justify creating inherited IRA accounts for each of the various
beneficiaries, and liquidating the IRA would be the best option. On the other hand, if it is a large IRA, the liquidation of the IRA would deny the ability of each beneficiary to stretch out his or her payments into the future. If some of the beneficiaries
want cash, and others want an inherited IRA, it would probably be best to give them each an inherited IRA, and let each of them decide when to liquidate their particular account. I say that because it may be difficult to work out the tax consequences fairly
if some of them receive inherited IRA accounts and the rest receive cash from the estate after the estate has liquidated the rest of the main IRA account. Keep in mind that the distribution of an IRA intact does not carry out income, because most IRAs lack
basis, and the code provides that an asset that lacks basis does not carry out income. As a result, you have to proceed very carefully when dealing with a situation like this. This is because an IRA constitutes IRD, or income in respect of a decedent. I'm
assuming that this is a traditional IRA and not a Roth IRA. This is a complicated subject and will require some complex analysis. Proceed with caution.<o:p></o:p></p>
</div>
<div>
<p class="MsoNormal">Phil Jones<o:p></o:p></p>
</div>
</div>
</div>
<div id="ms-outlook-mobile-signature">
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<p class="MsoNormal">Get <a href="https://aka.ms/o0ukef">Outlook for iOS</a><o:p></o:p></p>
</div>
</div>
<div class="MsoNormal" align="center" style="text-align:center">
<hr size="2" width="98%" align="center">
</div>
<div id="divRplyFwdMsg">
<p class="MsoNormal"><b><span style="color:black">From:</span></b><span style="color:black">
<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a>> on behalf of
<a href="mailto:Jeff@bellanddavispllc.com">Jeff@bellanddavispllc.com</a> <<a href="mailto:Jeff@bellanddavispllc.com">Jeff@bellanddavispllc.com</a>><br>
<b>Sent:</b> Thursday, October 27, 2022 12:43:53 PM<br>
<b>To:</b> 'WSBA Probate & Trust Listserv' <<a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject:</b> [WSBAPT] IRA Payable to Estate - PR"s authority to distribute in kind or cash and distribute cash (with K-1)</span>
<o:p></o:p></p>
<div>
<p class="MsoNormal"> <o:p></o:p></p>
</div>
</div>
<div>
<div>
<p class="xmsonormal">Listmates:<o:p></o:p></p>
<p class="xmsonormal"> <o:p></o:p></p>
<p class="xmsonormal">IRA has no POD beneficiaries, so it becomes an estate asset. Many residuary beneficiaries who take in varying percentages. Administratively, the Personal Representative prefers to liquidate the IRA and distribute the cash (per the %)
and each beneficiary would receive a K-1. Does the PR have the right to liquidate the IRA, rather than offering the beneficiaries the option of taking their % in kind? Does the PR have to consider the income tax consequences of each beneficiary?<o:p></o:p></p>
<p class="xmsonormal"> <o:p></o:p></p>
<p class="xmsonormal">Your thoughts and/or experiences.<o:p></o:p></p>
<p class="xmsonormal"> <o:p></o:p></p>
<p class="xmsonormal">Jeff Davis<o:p></o:p></p>
<p class="xmsonormal"> <o:p></o:p></p>
<p class="xmsonormal"><b><span style="font-family:"Tahoma",sans-serif">W. Jeff Davis</span></b><o:p></o:p></p>
<p class="xmsonormal"><b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">BELL & DAVIS PLLC</span></b><o:p></o:p></p>
<p class="xmsonormal"><b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">Attorneys at Law</span></b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black"><br>
P.O. Box 510</span><span style="color:black"><o:p></o:p></span></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">720 E. Washington Street, Suite 105<br>
Sequim WA 98382<br>
Phone: (360) 683.1129 <br>
Fax: (360) 683.1258 <br>
email: </span><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif"><a href="mailto:jeff@bellanddavispllc.com"><span style="color:#0563C1">jeff@bellanddavispllc.com</span></a><span style="color:black"><br>
</span></span><a href="https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.bellanddavispllc.com%2F&data=05%7C01%7Cpjones%40duffykekel.com%7C7df2296d0dad4a1e61f108dab853f898%7C2d66ed5354fa4c2f8c4dbff1aca5479d%7C0%7C0%7C638024968047562014%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=%2BvsraNTb8kKuPQrXJGb4KSEPTyUOsm789gozvTGYKyE%3D&reserved=0" target="_blank"><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif">www.bellanddavispllc.com</span></a><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black"><br>
<br>
The information contained in this e-mail message may be privileged, confidential, and protected from disclosure. If you are not the intended recipient, any dissemination, distribution, or copying is strictly prohibited. If you think that you have received this
e-mail message in error, please e-mail the sender at </span><a href="mailto:info@bellanddavispllc.com"><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif">info@bellanddavispllc.com</span></a><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:black">
or call 360.683.1129.</span><o:p></o:p></p>
<p class="xmsonormal"><b> </b><o:p></o:p></p>
<p class="xmsonormal"> <o:p></o:p></p>
</div>
</div>
</div>
</body>
</html>