Where an estate tax is imposed, the beneficiary is entitled to a partial income tax deduction for the estate tax paid. If you have named no beneficiary or, in most cases. Heirs don't get the option of using their own life expectancy. The above discussion covered the general rules as to the withdrawal of retirement plan distributions both before and after you die. Unfortunately, this general rule doesn't apply to money in a retirement plan.
Life insurance proceeds paid in a lump sum are tax-exempt.
However, if they are paid in installments, the interest element is taxable. The value of a stock bonus is taxable when received as ordinary income, less unrealized appreciation and after-tax investment. Any appreciation is taxable as capital gain when the stock is sold. No other heir can roll over from your account. There s no early withdrawal penalty on what your heir withdraws after your death, even if the heir is under age 59 .