Lump Sum Distribution form 4972

Forum|Forum|3 years ago
February 26, 2023
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Mom died in 2022 and had a sizeable tax deferred annuity-pension from teaching. She was born before 1936. Three daughters were each given a 33% share as lump sum distributions. two received $$ in 2022. One received $$ in early Jan 2023 thru no fault of her own. Does this disqualify us from using income averaging using 4972? Box 2b (total distribution) is NOT checked; Box 7 (distribution code) has an "A".

Best answer by dmertz

It's unfortunate that any distributions were made before all could be done simultaneously. Had all of the distributions been delayed until 2023, it would have qualified as a lump-sum distribution.

dmertz

Level 15

Yes, the fact that the entire balance of your mother's retirement plan was not distributed in a single taxable year disqualifies the distributions from being lump-sum distributions. The payer should not have included code A in box 7 of any of the Forms 1099-R if they were unable to mark box 2b Total distribution.

DaleEllenAuthor

Level 2

Thank you for your reply!. I did forget to write that mom passed in Sept. and by the time all general paperwork was completed, it was Dec. We all submitted our applications to withdraw the $ at similar times in Dec and were in touch with personnel who assured us Dec. One sister didn’t make it and her withdrawal came early Jan. A shame if we can’t income average because of this !

dmertzAnswer

Level 15

It's unfortunate that any distributions were made before all could be done simultaneously. Had all of the distributions been delayed until 2023, it would have qualified as a lump-sum distribution.