Reporting of previously taxed portion of 457(f) death benefit paid to beneficiary

Hi everyone,

Came across an interesting one!  Participant in a tax exempt 457(f) plan died and a portion of the benefit was previously included in the participant's income (i.e. the participant paid taxes for a portion of the benefit which vested in a prior year).  Trustee says that the total amount distributed to the beneficiary, including the previously taxed amount, will be reported in Box 3 of 1099-Misc.  I am familiar with the timing rules for reporting death benefits in the w-2 and 1099-Misc, and have thoroughly reviewed the 1099-Misc instructions. 

My questions are:

1. Whether the trustee should be reporting the total distribution in Box 3 of the 1099-Misc, or just the taxable portion?
2. If the trustee insists on reporting the total distribution (both taxable and non-taxable portion) in Box 3, how should the beneficiary avoid double taxation on the portion that was previously taxed?  Should we provide some kind of statement to the beneficiary that includes the portion of the distribution that was previously taxed? 
3. Bonus question- any thoughts on how the beneficiary could have the previously taxed portion excluded from income when the beneficiary files their tax return? 

Thanks in advance!

Just responding to bring to the top of the benefitslink mail box   Any thoughts are appreciated!