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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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."
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
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