Instructions For Forms 1099-R And 5498 - Distributions From Pensions, Annuities, Retirement Or Profit-Sharing Plans, Iras, Insurance Contracts, Etc. And Ira Contribution Information - 2016 Page 12
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24Box 3. Capital Gain (Included in Box 2a)
Method for Computing Amount Eligible for
If any amount is taxable as a capital gain, report it in
Capital Gain Election (See Box 3.)
box 3.
Step 1. Total Taxable Amount
Charitable gift annuities. Report in box 3 any amount
A. Total distribution
XXXXX
from a charitable gift annuity that is taxable as a capital
B. Less:
gain. Report in box 1 the total amount distributed during
the year. Report in box 2a the taxable amount. Advise the
1. Current actuarial value of any annuity
XXXX
annuity recipient of any amount in box 3 subject to the
2. Employee contributions or designated Roth
contributions (minus any amounts previously
28% rate gain for collectibles and any unrecaptured
distributed that were not includible in the
section 1250 gain. Report in box 5 any nontaxable
employee's gross income)
XXXX
amount. Enter Code F in box 7. See Regulations section
3. Net unrealized appreciation in the value of
1.1011-2(c), Example 8.
any employer securities that was a part of the
Special rule for participants born before January 2,
lump-sum distribution.
XXXX
1936 (or their beneficiaries). For lump-sum
C. Total of lines 1 through 3
XXXXX
distributions from qualified plans only, enter the amount in
D. Total taxable amount. Subtract line C from
XXXXX
box 2a eligible for the capital gain election under section
line A.
1122(h)(3) of the Tax Reform Act of 1986 and section
641(f)(3) of the Economic Growth and Tax Relief
Step 2. Capital Gain
Reconciliation Act of 2001. Enter the full amount eligible
for the capital gain election. You should not complete this
box for a direct rollover.
To compute the months of an employee's active
Total taxable
Months of active
amount
participation before 1974
participation before 1974, count as 12 months any part of
Line D
X
____________________
= Capital gain
a calendar year in which an employee actively
_
participated under the plan; for active participation after
Total months of active
1973, count as 1 month any part of a month in which the
participation
employee actively participated under the plan. See the
Example below.
Active participation begins with the first month in which
Box 4. Federal Income Tax Withheld
an employee became a participant under the plan and
ends with the earliest of:
Enter any federal income tax withheld. This withholding
The month in which the employee received a lump-sum
under section 3405 is subject to deposit rules and the
distribution under the plan;
withholding tax return is Form 945. Backup withholding
does not apply. See Pub. 15-A, Employer's Supplemental
For an employee, other than a self-employed person or
Tax Guide, and the Instructions for Form 945 for more
owner-employee, the month in which the employee
withholding information.
separates from service;
The month in which the employee dies; or
Even though you may be using Code 1 in box 7 to
For a self-employed person or owner-employee, the
designate an early distribution subject to the 10%
first month in which the employee becomes disabled
additional tax specified in section 72(q), (t), or (v), you are
within the meaning of section 72(m)(7).
not required to withhold that tax.
The amount withheld cannot be more than the
sum of the cash and the FMV of property
TIP
(excluding employer securities) received in the
distribution. If a distribution consists solely of employer
securities and cash ($200 or less) in lieu of fractional
shares, no withholding is required.
To determine your withholding requirements for any
designated distribution under section 3405, you must first
determine whether the distribution is an eligible rollover
distribution. See Direct Rollovers, earlier, for a discussion
of eligible rollover distributions. If the distribution is not an
eligible rollover distribution, the rules for periodic
payments or nonperiodic distributions apply. For purposes
of withholding, distributions from any IRA are not eligible
rollover distributions.
Eligible rollover distribution; 20% withholding. If an
eligible rollover distribution is paid directly to an eligible
retirement plan in a direct rollover, do not withhold federal
income tax. If any part of an eligible rollover distribution is
not a direct rollover, you must withhold 20% of the part
-12-
Instructions for Forms 1099-R and 5498 (2016)
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