Qualified total distribution

Qualified total distribution

A payment representing an employee's interest in a qualified retirement plan. The payment must be prompted by retirement (or other separation from service), death, disability, or attainment of age 59-1/2. Payment can be in installments as long as the complete distribution is made within a single tax year.

Qualified Total Distribution

The total amount to which a person is entitled from his/her qualified retirement plan. Depending on the nature of the retirement plan, this amount can be fixed, or it could vary according to how long the person lives. See also: Qualified distribution.
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402(a)(5) (before amendment by the UCA), and that the failure to distribute would not disqualify an otherwise qualified total distribution under Sec.
Therefore, the distributions would not qualify for special lump-sum treatment as a qualified total distribution, and would qualify for rollover only if the distributions met the partial distribution rules of Sec.
The IRS has issued Letter Ruling 9139031(70) revoking an earlier letter ruling that held that a distribution of a participant's remaining account balance, after a portion of the plan's assets was transferred to another plan, is a qualified total distribution and a lump-sum distribution if the participant was over age 59 1/2.
Company N requested rulings on whether the distribution of plan assets would be a qualified total distribution or a lump-sum distribution for participants age 59 1/2 at the date of distribution.
Since the participants in the Company N plan will receive their account balances after the transfer of the CODA portion of plan assets, the distributions will be neither qualified total distributions for Sec.
3405(b)(2) requires the payor of any nonperiodic distribution to withhold from such distribution 10% for distributions that are not qualified total distributions, and an amount determined under IRS tables for qualified total distributions.
The Service ruled that a distribution of a participant's remaining account balance, after a portion of the plan's assets was transferred to another plan, was a qualified total distribution and a lump-sum distribution if the participant was over age 59 1/2.
N requested rulings on whether the distribution of plan assets would e a qualified total distribution or a lumpsum distribution for participants who were 59 1/2 at the date of distribution.
The IRS originally ruled that a total distribution of plan assets on termination, after a portion had been transferred to another plan, was a qualified total distribution and a lump-sum distribution for participants over 59 1/2.
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