What would the tax consequences be if my father distributes $25,000 to each of his three children from his 401(k) when he passes?

My father is 81 years old and his only income is from Social Security and approximately $2,000 per year as a required minimum distribution from his 401(k). His total income is approximately $30,000.00 annually. When he passes, he wishes to leave each of his three children $25,000.00 each. What are the tax consequences of the three $25,000 distributions?

Social Security, 401(k), Taxes, End of Life
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April 2018


   Depending on what state you each live in, then each of you might have to pay state inheritance tax. On the federal level, you will not owe individual income tax on the amount. 

Kimberly J. Howard, CFP

March 2018
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March 2018