inheritance tax

[jennymorgan]

What is the name of your state?Indiana
My mother-in-law just passed and she left her Pension, 401k and life insurance to her two biological children(in their names). We were told by two different people two different things.
The question is do we have to pay any taxes, since she did not leave them to an estate, but her blood children?

 

[Snipes5]

Life insurance proceeds are not taxable.

401K funds ARE taxable to the recipient, just as they would have been taxable to the deceased. They will be reported via forms 1099R, which the recipients must list on their tax returns.

Snipes