Lump Sum Distribution

Lump-Sum Distribution

A one-time payment of the entire amount owed to another party. Examples of lump sum distributions include life insurance pay outs, or death benefits from a pension. It is important to note that, by definition, lump-sum distributions do not occur in annuities, as annuities pay out a certain amount over time.

Lump Sum Distribution

A lump-sum distribution is the payment of the entire balance in an individual's employer-provided retirement plan in one calendar year. When figuring whether a distribution is a lump-sum distribution, special rules apply to individuals who participate in more than one plan. The recipient of a lump-sum distribution may be eligible for special tax treatment of the distribution. See "10-Year Averaging."
References in periodicals archive ?
By allowing this exchange, the IRS permitted the beneficiary to exchange the entire pre-tax value of the inherited annuity, rather than requiring that she take a lump sum distribution of the inherited annuity interest, pay taxes on this distribution and then purchase the replacement annuity contract with the after-tax value.
Some of these retirees who have traditional defined benefit pension plans will face a decision: Start their monthly pension, or take a lump sum distribution and roll it over to an IRA?
The payment was a lump sum distribution of the entire balance of Frantz's deferred compensation arrangement, which was approved by Alltel before it was spun off from Windstream, according to the proxy statement.
By taking a lump sum distribution, the assets in your plan are distributed directly to you, providing you with immediate access to your funds.
A taxpayer took a lump sum distribution from an annuity and suffered a loss in value.
Muller look at some of the factors influencing the decision to take and how to use a lump sum distribution.
In Darby (97 TC 51 (1991)), the Tax Court held that a lump sum distribution to a nonparticipant spouse, who had no right to the money until the court assigned it to her in the divorce, was taxable to the participant spouse.
In general, a lump sum distribution is a distribution within one taxable year of the account balance or accrued benefit of the participant.
402(e)(4)(B), discussing the election of 10-year averaging, stated that "no amount which is not an annuity contract may be treated as a lump sum distribution .
Of course, the spouse can take a lump sum distribution of the IRA.
A lump sum distribution is a payout of a participant's entire interest that meets certain conditions.
From a participant perspective, the decision to receive a lump sum distribution is completely voluntary.