Tax implications upon death

[Guest Carl C]

Recently my mother passed away and left two TSA accounts. I don't have the paperwork in front of me, but I believe they were 403b plans (she did work in a non-profit hospital). It's undetermined at this moment whether I am the beneficiary or the estate is. The question is, does the estate or the beneficiary have to pay any income taxes on these amounts inherited? I'm not concerned with inheritance taxes.

TIA, Carl C

[Michael Devault]

The beneficiary pays income taxes. If you are named as beneficary, you'll have to pay the income taxes. But, the income is Income in Respect of a Decedent (IRD), so you may get some relief (but it won't be a great amount).

If the estate is the beneficiary, income will be paid to the estate, where taxes will have to be paid before the net is distributed to the estate beneficaries.

Hope this helps