Fillable Form 4972 - Tax On Lump-Sum Distributions

Page

Form 4972 (2014)

Part II

Tax Rate Schedule

If you did not make the 20% capital gain

election and did not elect to include NUA in

If the amount on

Enter on line

See Capital Gain Election, earlier, before

taxable income, enter the amount from

line 23 or 26 is:

24 or 27:

completing Part II.

Form 1099-R, box 2a. If you did not make

Line 6. Leave this line blank if your

Of the

the 20% capital gain election but did elect

But not

amount

distribution does not include a capital gain

to include NUA in your taxable income, add

Over

over—

amount or you are not making the 20%

the amount from Form 1099-R, box 2a, to

capital gain election, and go to Part III.

$ 0

$ 1,190

- - - - - 11%

$ 0

the amount from Form 1099-R, box 6.

Generally, enter on line 6 the amount

1,190

2,270

$130.90 + 12%

1,190

Enter the total on line 8. On the dotted line

from Form 1099-R, box 3. However, if you

next to line 8, write “NUA” and the amount

2,270

4,530

260.50 + 14%

2,270

elect to include NUA in your taxable

from Form 1099-R, box 6.

4,530

6,690

576.90 + 15%

4,530

income, use the NUA Worksheet, earlier, to

▲

figure the amount to enter on line 6. If you

Community property laws do

6,690

9,170

900.90 + 16%

6,690

are taking a death benefit exclusion (see

not apply in figuring tax on the

9,170

11,440

1,297.70 + 18%

9,170

Line 9 below for the definition), use the

amount you report on line 8.

11,440

13,710

1,706.30 + 20%

11,440

CAUTION

Death Benefit Worksheet, earlier, to figure

the amount to enter on line 6. The

13,710

17,160

2,160.30 + 23%

13,710

Line 9. If you received the distribution

remaining allowable death benefit

17,160

22,880

2,953.80 + 26%

17,160

because of the plan participant’s death and

exclusion should be entered on line 9 if you

the participant died before August 21,

22,880

28,600

4,441.00 + 30%

22,880

choose the 10-year tax option.

1996, you may be able to exclude up to

28,600

34,320

6,157.00 + 34%

28,600

If any federal estate tax was paid on the

$5,000 of the lump sum from your gross

lump-sum distribution, you must decrease

34,320

42,300

8,101.80 + 38%

34,320

income. This exclusion applies to the

the capital gain amount by the amount of

beneficiaries or estates of common-law

42,300

57,190

11,134.20 + 42%

42,300

estate tax applicable to it. To figure this

employees, self-employed individuals, and

57,190

85,790

17,388.00 + 48%

57,190

amount, you must complete the Death

shareholder-employees who owned more

Benefit Worksheet, earlier, through line C,

85,790

31,116.00 + 50%

85,790

- - - - -

than 2% of the stock of an S corporation.

even if you do not take the death benefit

Enter the allowable death benefit

exclusion. Multiply the total federal estate

Paperwork Reduction Act Notice. We

exclusion on line 9. If you made the 20%

tax paid on the lump-sum distribution (get

ask for the information on this form to carry

capital gain election, enter the amount from

this amount from the administrator of the

out the Internal Revenue laws of the United

line D of the Death Benefit Worksheet

deceased's estate) by the decimal on line

States. You are required to give us the

minus the amount from line E of that

C of the Death Benefit Worksheet. The

information. We need it to ensure that you

worksheet.

result is the portion of the federal estate tax

are complying with these laws and to allow

Multiple recipients. If there are multiple

applicable to the capital gain amount.

us to figure and collect the right amount of

recipients of the distribution not all of

Then, use that result to reduce the amount

tax.

whom are trusts, and you did not complete

in Form 1099-R, box 3, if you do not take

You are not required to provide the

Part II, enter the full allowable death benefit

the death benefit exclusion, or reduce line

information requested on a form that is

exclusion on line 9 (do not allocate among

F of the Death Benefit Worksheet if you do.

subject to the Paperwork Reduction Act

the recipients-the computation under

Enter the remaining capital gain on line 6. If

unless the form displays a valid OMB

Multiple recipients of a lump-sum

you elected to include NUA in taxable

control number. Books or records relating

distribution, earlier, in effect allocates the

income and you did not take the death

to a form or its instructions must be

exclusion).

benefit exclusion, subtract the portion of

retained as long as their contents may

If you completed Part II, multiply the full

federal estate tax applicable to the capital

become material in the administration of

allowable death benefit exclusion (do not

gain amount from the amount on line G of

any Internal Revenue law. Generally, tax

allocate among the recipients) by the

the NUA Worksheet. Enter the result on line

returns and return information are

percentage on line C of the Death Benefit

6. Enter the remainder of the federal estate

confidential, as required by section 6103.

Worksheet. Subtract the result from the full

tax on line 18.

The time needed to complete this form

allowable death benefit exclusion. Enter the

will vary depending on individual

▲

If you take the death benefit

result on line 9.

circumstances. The estimated burden for

exclusion and federal estate tax

Line 18. A beneficiary who receives a

individual taxpayers filing this form is

was paid on the capital gain

lump-sum distribution because of a plan

approved under OMB control number

CAUTION

amount, the capital gain amount

participant’s death must reduce the taxable

1545-0074 and is included in the estimates

must be reduced by both the procedures

part of the distribution by any federal

shown in the instructions for their individual

discussed above to figure the correct entry

estate tax paid on the lump-sum

income tax return. The estimated burden

for line 6.

distribution (get this amount from the

for all other taxpayers who file this form is

administrator of the deceased's estate). Do

Part III

shown below.

this by entering on line 18 the federal

Multiple recipients see Multiple recipients

Recordkeeping .

. 19 min.

estate tax attributable to the lump-sum

of a lump-sum distribution, earlier.

distribution. Also see Line 6 above if you

Learning about the law

made a capital gain election.

or the form

. 1 hr., 36 min.

Line 8. If Form 1099-R, box 2a, is blank,

Lines 24 and 27. Use the following Tax

you must first figure the taxable amount.

Preparing the form .

2 hr., 7 min.

Rate Schedule to complete lines 24 and 27.

For details on how to do this, see Pub. 575.

Copying, assembling, and

Line 29. Multiple recipients see Multiple

If you made the 20% capital gain

sending the form to the IRS .

. 20 min.

recipients of a lump-sum distribution,

election, enter only the ordinary income

earlier.

If you have comments concerning the

portion of the distribution on this line. The

accuracy of these time estimates or

ordinary income portion is the amount from

suggestions for making this form simpler,

Form 1099-R, box 2a, minus the amount

we would be happy to hear from you. See

from box 3 of that form. Add the amount

the instructions for the tax return with

from line F of the NUA Worksheet if you

which this form is filed.

included NUA capital gain in the 20%

capital gain election. On the dotted line

next to line 8, write "NUA" and the amount

from line F of the NUA Worksheet.

Form 4972 - Tax On Lump-Sum Distributions - 2014 Page 4

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