Fillable Form 4972 - Tax On Lump-Sum Distributions

Page

Form 4972 (2012)

the beneficiary. You also received a

If you received more than one qualified

• If you are making the capital gain

election, subtract the amount in box 3 from

qualified lump-sum distribution from your

distribution in 2012 for the same plan

own plan and you were born before

participant, add them and figure the tax on

the amount in box 2a. Divide the result by

January 2, 1936. You can make an election

the total amount. If you received qualified

your percentage of distribution in box 9a.

for each of the distributions; one for

distributions in 2012 for more than one

Enter the result on Form 4972, line 8.

yourself, one as your mother’s beneficiary,

participant, file a separate Form 4972 for

• Divide the amount in box 8 by the

and one as your father’s. It does not matter

the distributions of each participant.

percentage in box 8. Enter the result on

if the distributions all occur in the same

If you and your spouse are filing a joint

Form 4972, line 11. Then, skip Step 3 and

year or in different years. File a separate

return and each has received a lump-sum

go to Step 4.

Form 4972 for each participant’s

distribution, complete and file a separate

Step 3. Use this step only if you elect to

distribution.

Form 4972 for each spouse’s election,

include NUA in your taxable income.

combine the tax, and include the combined

An earlier election on Form 4972

• If you are not making the capital gain

tax in the total on Form 1040, line 44.

or Form 5544 for a distribution

TIP

election, add the amount in box 2a to the

If you are filing for a trust that shared the

before 1987 does not prevent

amount in box 6. Divide the result by your

distribution only with other trusts, figure the

you from making an election for

percentage of distribution in box 9a. Enter

tax on the total lump sum first. The trusts

a distribution after 1986 for the same

the result on Form 4972, line 8.

then share the tax in the same proportion

participant, provided the participant was

• If you are making the capital gain

that they shared the distribution.

under age 59½ at the time of the pre-1987

election, subtract the amount in box 3 from

Multiple recipients of a lump-sum

distribution.

the amount in box 2a. Add to the result the

distribution. If you shared in a lump-sum

amount from line F of your NUA

When To File Form 4972

distribution from a qualified retirement plan

Worksheet. Then, divide the total by your

when not all recipients were trusts (a

You can file Form 4972 with either an

percentage of distribution in box 9a. Enter

percentage will be shown in Form 1099-R,

original or amended return. Generally, you

the result on Form 4972, line 8.

boxes 8 and/or 9a), figure your tax on Form

have 3 years from the later of the due date

• Divide the amount in box 8 by the

4972 as follows. (Box numbers used below

of your tax return or the date you filed your

percentage in box 8. Enter the result on

are from Form 1099-R.)

return to choose to use any part of Form

Form 4972, line 11.

Step 1. Complete Form 4972, Parts I and

4972.

Step 4. Complete Form 4972 through

II. If you make the 20% capital gain

Capital Gain Election

line 28.

election in Part II and also elect to include

NUA in taxable income, complete the NUA

Step 5. Complete the following

If the distribution includes a capital gain,

Worksheet below to determine the amount

worksheet to figure the entry for Form

you can (a) make the 20% capital gain

of NUA that qualifies for capital gain

4972, line 29:

election in Part II of Form 4972 or (b) treat

treatment. Then, skip Step 2 and go to

the capital gain as ordinary income.

Step 3.

Only the taxable amount of distributions

A. Subtract line 28 from line 25

Step 2. Use this step only if you do not

resulting from pre-1974 participation

elect to include NUA in your taxable

qualifies for capital gain treatment. The

B. Enter your percentage of the

income or if you do not have NUA.

distribution from box 9a

capital gain amount should be shown in

• If you are not making the capital gain

Form 1099-R, box 3. If there is an amount

C. Multiply line A by line B. Enter

election, divide the amount in box 2a by

in Form 1099-R, box 6 net unrealized

here and on Form 4972, line 29.

your percentage of distribution in box 9a.

Also, write “MRD” on the dotted

appreciation (NUA), part of it will also

Enter this amount on Form 4972, line 8.

line next to line 29 .

qualify for capital gain treatment. Use the

NUA Worksheet on this page to figure the

capital gain part of NUA if you make the

NUA Worksheet (keep for your records)

election to include NUA in your taxable

income.

Enter the amount from Form 1099-R, box 3

You can report the ordinary income

Enter the amount from Form 1099-R, box 2a .

portion of the distribution on Form 1040,

line 16b, Form 1040NR, line 17b, or Form

Divide line A by line B and enter the result as a decimal (rounded to at

1041, line 8 or you can figure the tax using

least three places)

the 10-year tax option. The ordinary

Enter the amount from Form 1099-R, box 6

income portion is the amount from Form

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

Capital gain portion of NUA. Multiply line C by line D

box 3 of that form.

Ordinary income portion of NUA. Subtract line E from line D

Net unrealized appreciation (NUA).

Total capital gain portion of distribution. Add lines A and E. Enter here

Normally, NUA in employer securities

and on Form 4972, line 6. On the dotted line next to line 6, write

received as part of a lump-sum distribution

is not taxable until the securities are sold.

"NUA" and the amount from line E above .

However, you can elect to include NUA in

Death Benefit Worksheet (keep for your records)

taxable income in the year received.

The total amount to report as NUA

Enter the amount from Form 1099-R, box 3, or, if you are including

should be shown in Form 1099-R, box 6.

Part of the amount in box 6 will qualify for

NUA in taxable income, the amount from line G of the NUA Worksheet

capital gain treatment if there is an amount

Enter the amount from Form 1099-R, box 2a, plus, if you are including

in Form 1099-R, box 3. To figure the total

NUA in taxable income, the amount from Form 1099-R, box 6 .

amount subject to capital gain treatment

including the NUA, complete the NUA

Divide line A by line B and enter the result as a decimal (rounded to at

Worksheet on this page.

least three places)

Enter your share of the death benefit exclusion* .

Specific Instructions

Multiply line D by line C .

Subtract line E from line A. Enter here and on Form 4972, line 6

Name of recipient of distribution and

identifying number. At the top of Form

*Applies only for participants who died before August 21, 1996. If there are multiple recipients of the distribution,

the allowable death benefit exclusion must be allocated among the recipients in the same proportion that they

4972, fill in the name and identifying

share the distribution.

number of the recipient of the distribution.

Form 4972 - Tax On Lump-Sum Distributions - 2012 Page 3

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