Fillable Form 4972 - Tax On Lump-Sum Distributions

Page

Form 4972 (2015)

Part II

Tax Rate Schedule

If you did not make the 20% capital gain

election and did not elect to include NUA in

See Capital Gain Election, earlier, before

If the amount on

Enter on line

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

distribution does not include a capital gain

But not

amount

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

Community property laws do

▲

figure the amount to enter on line 6. If you

6,690

9,170

900.90 + 16%

6,690

not apply in figuring tax on the

are taking a death benefit exclusion (see

9,170

11,440

1,297.70 + 18%

9,170

amount you report on line 8.

Line 9 below for the definition), use the

CAUTION

11,440

13,710

1,706.30 + 20%

11,440

Death Benefit Worksheet, earlier, to figure

Line 9. If you received the distribution

the amount to enter on line 6. The

13,710

17,160

2,160.30 + 23%

13,710

because of the plan participant’s death and

remaining allowable death benefit

17,160

22,880

2,953.80 + 26%

17,160

the participant died before August 21,

exclusion should be entered on line 9 if you

22,880

28,600

4,441.00 + 30%

22,880

1996, you may be able to exclude up to

choose the 10-year tax option.

$5,000 of the lump sum from your gross

28,600

34,320

6,157.00 + 34%

28,600

If any federal estate tax was paid on the

income. This exclusion applies to the

lump-sum distribution, you must decrease

34,320

42,300

8,101.80 + 38%

34,320

beneficiaries or estates of common-law

the capital gain amount by the amount of

42,300

57,190

11,134.20 + 42%

42,300

employees, self-employed individuals, and

estate tax applicable to it. To figure this

shareholder-employees who owned more

57,190

85,790

17,388.00 + 48%

57,190

amount, you must complete the Death

than 2% of the stock of an S corporation.

Benefit Worksheet, earlier, through line C,

85,790

31,116.00 + 50%

85,790

- - - - -

Enter the allowable death benefit

even if you do not take the death benefit

exclusion on line 9. If you made the 20%

exclusion. Multiply the total federal estate

Paperwork Reduction Act Notice. We

capital gain election, enter the amount from

tax paid on the lump-sum distribution (get

ask for the information on this form to carry

line D of the Death Benefit Worksheet

this amount from the administrator of the

out the Internal Revenue laws of the United

minus the amount from line E of that

deceased's estate) by the decimal on line

States. You are required to give us the

worksheet.

C of the Death Benefit Worksheet. The

information. We need it to ensure that you

Multiple recipients. If there are multiple

result is the portion of the federal estate tax

are complying with these laws and to allow

recipients of the distribution not all of

applicable to the capital gain amount.

us to figure and collect the right amount of

whom are trusts, and you did not complete

Then, use that result to reduce the amount

tax.

Part II, enter the full allowable death benefit

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

You are not required to provide the

exclusion on line 9 (do not allocate among

the death benefit exclusion, or reduce line

information requested on a form that is

the recipients-the computation under

F of the Death Benefit Worksheet if you do.

subject to the Paperwork Reduction Act

Multiple recipients of a lump-sum

Enter the remaining capital gain on line 6. If

unless the form displays a valid OMB

distribution, earlier, in effect allocates the

you elected to include NUA in taxable

control number. Books or records relating

exclusion).

income and you did not take the death

to a form or its instructions must be

benefit exclusion, subtract the portion of

If you completed Part II, multiply the full

retained as long as their contents may

federal estate tax applicable to the capital

allowable death benefit exclusion (do not

become material in the administration of

gain amount from the amount on line G of

allocate among the recipients) by the

any Internal Revenue law. Generally, tax

the NUA Worksheet. Enter the result on line

percentage on line C of the Death Benefit

returns and return information are

6. Enter the remainder of the federal estate

Worksheet. Subtract the result from the full

confidential, as required by section 6103.

tax on line 18.

allowable death benefit exclusion. Enter the

The time needed to complete this form

result on line 9.

If you take the death benefit

▲

will vary depending on individual

exclusion and federal estate tax

Line 18. A beneficiary who receives a

circumstances. The estimated burden for

was paid on the capital gain

lump-sum distribution because of a plan

individual taxpayers filing this form is

amount, the capital gain amount

participant’s death must reduce the taxable

CAUTION

approved under OMB control number

must be reduced by both the procedures

part of the distribution by any federal

1545-0074 and is included in the estimates

discussed above to figure the correct entry

estate tax paid on the lump-sum

shown in the instructions for their individual

for line 6.

distribution (get this amount from the

income tax return. The estimated burden

administrator of the deceased's estate). Do

for all other taxpayers who file this form is

Part III

this by entering on line 18 the federal

shown below.

Multiple recipients see Multiple recipients

estate tax attributable to the lump-sum

Recordkeeping .

. 19 min.

of a lump-sum distribution, earlier.

distribution. Also see Line 6 above if you

Learning about the law

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

made a capital gain election.

or the form.

. 1 hr., 36 min.

you must first figure the taxable amount.

Lines 24 and 27. Use the following Tax

Preparing the form .

2 hr., 7 min.

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

Rate Schedule to complete lines 24 and 27.

Copying, assembling, and

If you made the 20% capital gain

Line 29. Multiple recipients see Multiple

sending the form to the IRS .

. 20 min.

election, enter only the ordinary income

recipients of a lump-sum distribution,

portion of the distribution on this line. The

If you have comments concerning the

earlier.

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

from box 3 of that form. Add the amount

we would be happy to hear from you. See

from line F of the NUA Worksheet if you

the instructions for the tax return with

included NUA capital gain in the 20%

which this form is filed.

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 - 2015 Page 4

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