Lump Sum Distribution form 4972

[DaleEllen]

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".

[dmertz]

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.

[DaleEllen]

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 !

[dmertz · Accepted solution]

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.