Fillable Tax On Lump-Sum Distributions (Form 4972 2013) (Page 2 of 4) in pdf

Page

Form 4972 (2013)

Section references are to the Internal

distribution using the 10-year tax option

the distribution is partially rolled over to

Revenue Code.

whether or not you make the 20% capital

another qualified plan or an IRA.

gain election.

Future developments. For the latest

• Any distribution if an earlier election to

information about developments related to

Where to report. Report amounts from

use either the 5- or 10-year tax option had

Form 4972 and its instructions, such as

your Form 1099-R either directly on your

been made after 1986 for the same plan

legislation enacted after they were

tax return (Form 1040, 1040NR, or 1041) or

participant.

published, go to

on Form 4972.

• U.S. Retirement Plan Bonds distributed

1. If you do not use Form 4972, and you

General Instructions

with the lump sum.

file:

• A distribution made during the first 5 tax

Purpose of Form

a. Form 1040. Report the entire amount

years that the participant was in the plan,

from box 1 (Gross distribution) of Form

unless it was paid because the participant

Use Form 4972 to figure the tax on a

1099-R on line 16a, and the taxable

died.

qualified lump-sum distribution (defined

amount on line 16b. If your pension or

below) you received in 2013 using the 20%

• The current actuarial value of any annuity

annuity is fully taxable, enter the amount

capital gain election, the 10-year tax

contract included in the lump sum (Form

from box 2a (Taxable amount) of Form

option, or both. These are special formulas

1099-R, box 8, should show this amount,

1099-R on line 16b; do not make an entry

used to figure a separate tax on the

which you use only to figure tax on the

on line 16a.

distribution that may result in a smaller tax

ordinary income part of the distribution).

b. Form 1040NR. Report the entire

than if you reported the taxable amount of

• A distribution to a 5% owner that is

amount from box 1 (Gross distribution) of

the distribution as ordinary income.

subject to penalties under section

Form 1099-R on line 17a, and the taxable

You pay the tax only once, for the year

72(m)(5)(A).

amount on line 17b. If your pension or

you receive the distribution, not over the

• A distribution from an IRA.

annuity is fully taxable, enter the amount

next 10 years. The separate tax is added to

from box 2a (Taxable amount) of Form

• A distribution from a tax-sheltered

the regular tax figured on your other

1099-R on line 17b; do not make an entry

annuity (section 403(b) plan).

income.

on line 17a.

• A distribution of the redemption proceeds

Related Publications

c. Form 1041. Report the amount on

of bonds rolled over tax free to a qualified

pension plan, etc., from a qualified bond

line 8.

Pub. 575, Pension and Annuity Income.

purchase plan.

2. If you do not use Part III of Form 4972,

Pub. 721, Tax Guide to U.S. Civil Service

but use Part II, report only the ordinary

• A distribution from a qualified plan if the

Retirement Benefits.

income portion of the distribution on Form

participant or his or her surviving spouse

Pub. 939, General Rule for Pensions and

1040, lines 16a and 16b, on Form 1040NR,

previously received an eligible rollover

Annuities.

lines 17a and 17b, or on Form 1041, line 8.

distribution from the same plan (or another

What Is a Qualified Lump-Sum

The ordinary income portion is the amount

plan of the employer that must be

Distribution?

from box 2a of Form 1099-R, minus the

combined with that plan for the lump-sum

amount from box 3 of that form.

distribution rules) and the previous

It is the distribution or payment in 1 tax

distribution was rolled over tax free to

3. If you use Part III of Form 4972, do not

year of a plan participant’s entire balance

another qualified plan or an IRA.

include any part of the distribution on Form

from all of an employer’s qualified plans of

1040, lines 16a and 16b, on Form 1040NR,

• A distribution from a qualified plan that

one kind (for example, pension, profit-

lines 17a and 17b, or on Form 1041, line 8.

received a rollover after 2001 from an IRA

sharing, or stock bonus plans) in which the

(other than a conduit IRA), a governmental

participant had funds. The participant’s

The entries in other boxes on Form

section 457 plan, or a section 403(b) tax-

entire balance does not include deductible

1099-R may also apply in completing

sheltered annuity on behalf of the plan

voluntary employee contributions or certain

Form 4972.

participant.

forfeited amounts. The participant must

• Box 6 (Net unrealized appreciation in

have been born before January 2, 1936.

• A distribution from a qualified plan that

employer’s securities). See Net unrealized

received a rollover after 2001 from another

Distributions upon death of the plan

appreciation (NUA) later.

qualified plan on behalf of that plan

participant. If you received a qualifying

• Box 8 (Other). Current actuarial value of

participant’s surviving spouse.

distribution as a beneficiary after the

an annuity.

participant’s death, the participant must

• A corrective distribution of excess

If applicable, get the amount of federal

have been born before January 2, 1936, for

deferrals, excess contributions, excess

estate tax paid attributable to the taxable

you to use this form for that distribution.

aggregate contributions, or excess annual

part of the lump-sum distribution from the

additions.

Distributions to alternate payees. If you

administrator of the deceased’s estate.

are the spouse or former spouse of a plan

• A lump-sum credit or payment under the

How Often You Can Use Form 4972

participant who was born before January 2,

alternative annuity option from the Federal

1936, and you received a qualified lump-

Civil Service Retirement System (or the

After 1986, you can use Form 4972 only

sum distribution as an alternate payee

Federal Employees’ Retirement System).

once for each plan participant. If you

under a qualified domestic relations order,

receive more than one lump-sum

How To Report the Distribution

you can use Form 4972 to make the 20%

distribution for the same participant in 1 tax

If you can use Form 4972, attach it to Form

capital gain election and use the 10-year

year, you must treat all those distributions

1040 (individuals), Form 1040NR

tax option to figure your tax on the

the same way. Combine them on a single

(nonresident aliens), or Form 1041 (estates

distribution.

Form 4972.

or trusts). The payer should have given you

See How To Report the Distribution on

If you make an election as a beneficiary

a Form 1099-R or other statement that

this page.

of a deceased participant, it does not affect

shows the amounts needed to complete

any election you can make for qualified

Distributions That Do Not Qualify for

Form 4972. The following choices are

lump-sum distributions from your own

the 20% Capital Gain Election or the

available.

plan. You can also make an election as the

10-Year Tax Option

20% capital gain election. If there is an

beneficiary of more than one qualifying

amount in Form 1099-R, box 3, you can

The following distributions are not qualified

person.

lump-sum distributions and do not qualify

use Form 4972, Part II, to apply a 20% tax

Example. Your mother and father died

for the 20% capital gain election or the 10-

rate to the capital gain portion. See Capital

and each was born before January 2, 1936.

year tax option.

Gain Election later.

Each had a qualified plan of which you are

10-year tax option. You can use Part III to

• The part of a distribution not rolled over if

figure your tax on the lump-sum

Tax On Lump-Sum Distributions (Form 4972 2013) Page 2

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