401k tax

Question

Nov 1, 2006, 12:38 PM

lisywisy

New Member

Join Date: Nov 2006

Posts: 1

401k tax

I hope someone can help me with this one, My aunt died this year her 401k was closed and the money was sent to her sisters in England, should there have been a lower tax paid on it because she had passed away, also should the tax have been different as it was leaving the country,

I really appreciate any help regarding this matter thank you in advance

Answers

Nov 1, 2006, 02:50 PM	#2

AtlantaTaxExpert Tax Expert Join Date: Feb 2005 Location: Atlanta, Georgia Posts: 9,873	Money probably was withheld to cover the income taxes due on distribution. The sisters need to file that tax return, because the 401K was funded with pre-tax money, and the distribution is considered income for tax purposes. The tax rate is no different than if her sisters lived in the U.S. They will have to file Form 1040NR or 1040NR-EZ as non-resident aliens.

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