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Level 1

Company annuity converted to lump sum paymnent

I received a monthly annuity payment from a company's non-qualified pension plan. The company was sold. They converted my annuity to a one-time lump sum payment. Do I have to treat that as regular income or are there special provisions to spread out tax payments on the lump sum?

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Expert Alumni

Company annuity converted to lump sum paymnent

There is no provision for spreading out lump sum payments for a on-qualified pension plan.  This is taxable in the year it is distributed.

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