1099-R form for death benefit

[pmacduff]

I did a search but can't find this particular question. I have also been through both the General instructions for forms 1099 and the specific 1099-R instructions.

There is a death benefit distribution that was paid to the decedent's estate in 2007 (no beneficiary designated, no spouse, no family). It's not a huge amount...just over $3500. Participant died in 2007 - a personal return (1040) will be filed. Participant made roughly $16,000 in payroll in 2007.

I know that I use the code "4" on the 1099-R form. My question relates to the amount boxes on the form. The gross distribution is $3,500, but what do I enter into the "taxable amount" box, if anything? The box is there to check for "taxable amount not determined", but I was advised some time ago that checking that box is "frowned upon" and the Service wants the plan to make every attempt to determine the taxability of the distribution.

I know I'm probably overthinking this whole thing, but I want to be sure the forms are accurate.

[Kimberly S]

How would you have completed the form if the benefit had gone to a survivin spouse? It should be the same.

[pmacduff]

Believe it or not, every surviving spouse I have had rolled the benefit, so the taxable amount was always $0.00. I thought that there was an amount (for example $10,000) of death benefit up to which there isn't any taxation.

My instincts tell me that the taxable amount in this case is the $3,500 and that whoever files the decedent's tax return for 2007 will do the reporting accordingly.

[Bird]

My instincts tell me that the taxable amount in this case is the $3,500 and that whoever files the decedent's tax return for 2007 will do the reporting accordingly.

Yes. (The tax free death benefit went away quite a while ago.)