topic I received a 1099R as a beneficiary for a lump sum distribution. How can I incorporate form 4972 (Lump Sum Distribution) in my return? in Retirement tax questions

I received a 1099R as a beneficiary for a lump sum distribution. How can I incorporate form 4972 (Lump Sum Distribution) in my return?

judybacher — Sun, 14 Mar 2021 19:16:12 GMT

Re: I received a 1099R as a beneficiary for a lump sum distribution. How can I incorporate form 4972 (Lump Sum Distribution) in my return?

dmertz — Sun, 14 Mar 2021 19:53:57 GMT

When you enter a Form 1099-R that has box 2b Total distribution marked, a code 4 in box 7 and the IRA/SEP/SIMPLE box unmarked, TurboTax will automatically present the Special Elections page where you can indicate that you want to see if you qualify to use Form 4972.

Re: I received a 1099R as a beneficiary for a lump sum distribution. How can I incorporate form 4...

KathrynG3 — Sun, 14 Mar 2021 20:15:44 GMT

These details will be captured in the interview questions following the inherited 1099-R entry and by what is entered for Form 1099-R as @dmertz said.

You are correct, Form 4972 must be used for inherited IRA's, which are generally taxable for Traditional IRAs. For an example of how to report this in TurboTax, see: Form 4972 Tax on Lump-Sum Distributions.

For instructions, see: 2020 Form 4972 Instructions.

Re: I received a 1099R as a beneficiary for a lump sum distribution. How can I incorporate form 4...

dmertz — Sun, 14 Mar 2021 20:35:49 GMT

Distributions from IRAs are not eligible for lump-sum treatment on Form 4972. Form 4972 only applies to lump-sum distributions from qualified retirement plans like a 401(k). I indicated that by saying that the IRA/SEP/SIMPLE box on the Form 1099-R must be unmarked.