Tax Liability of an Outstanding Loan that is Offset when Participant D

[Guest andmik]

I am trying to get clarification on who is responsible for the tax liability of an offset of an outstanding loan balance upon the death of the participant who has named a beneficiary? Any guidance will be appreciated.

[Guest mo again]

I don't know if this right and I'll probably go to jail one day, but I have taken the position that the beneficiary is not the recipient of this portion of the distribution, and that in fact the decedent was the recipient. Therefore I have been reporting as a deemed distribution to the decedent using his/her SSN, presumably to be included on the individual's final return.

[Kirk Maldonado]

Is there an "income in respect of a decedent" issue here?