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Pension income in 2019 was paid, partially as a lump-sum for failure of payer to make timely monthly payments. What is tax status of payment? Response was "Out of luck".

Is an IRS appeal possible in this case?
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Employee Tax Expert

Pension income in 2019 was paid, partially as a lump-sum for failure of payer to make timely monthly payments. What is tax status of payment? Response was "Out of luck".

Unless you were born before January 2, 1936, you would not qualify for the 'lump sum averaging'  on Form 4972 for your pension distribution, unfortunately 

 

If you contributed after-tax funds of your own, this amount would not be taxable and show in Box 5 of your 1099-R. 

 

You had the option to rollover your distribution to another retirement account.

 

In some cases, you may be eligible to report part of the distribution as Capital Gain. 

 

Click this link for more info from the IRS on Lump Sum Distributions. 

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