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    lisywisy's Avatar
    lisywisy Posts: 1, Reputation: 1
    New Member
     
    #1

    Nov 1, 2006, 02:38 PM
    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 :)
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
     
    #2

    Nov 1, 2006, 04:50 PM
    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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