Hi, all.
I was in Turbotax working on a 1099-R for an inherited 401(k), when it brought up a question about using a "Form 4972 (Tax on Lump-Sum Distributions) for a payment received for this same deceased person." I had never heard of this, so I searched it out and found this: https://fiscalwisdom.com/what-you-need-to-[product key removed]al-10-year-averaging/. Apparently, it’s possible to take a total distribution from certain "qualifying" retirement accounts and pay the tax as if it were spread out over ten years in the lowest bracket.
What I can’t find out for sure is whether a 401(k) is a "qualified plan" for purposes of this rule. This would really work to my advantage if it’s allowed. Turbotax documentation states that the distribution must be from "a qualified pension, profit-sharing or stock bonus plan, but not from an IRA [or] tax-sheltered annuity (section 403(b) plan)." However, I don’t know if this is an exhaustive and exclusive list, and it’s not clear why a qualified retirement account like a 401(k) should be treated differently from these other exotic things. Does the IRS consider a 401(k) an "annuity?"
I do appear to meet the other requirements. Original participant was born before 1936, no rollovers (just transfer of ownership to beneficiaries), full account value withdrawn, etc.
Thanks for any advice.
