Lump-sum Distribution

The Lump-sum Distribution are.

payment at one time, rather than in installments, of the entire amount of retirement benefits due. The payment within one year of the full amount of your interest in a pension or profit-sharing plan. See also five-year averaging; ten-year averaging subject to favorable tax treatment. IRC (check if this IRC provision is current here) §§62, 72, and 402(e).

To qualify as a lump-sum distribution – and for favorable tax treatment – other requirements must be met.

Description and Definition of Lump-sum Distribution

A distribution from a pension plan in which you receive the entire amount due you within one tax year because of an event such as retirement, separation from service, reaching age 59 1/2, death, – or in the case of a self-employed person, disability or reaching age 59 1/2.

Resources

See Also

Further Reading

• Lump-sum Distribution in the West's Tax Law Dictionary
• Lump-sum Distribution in “A Dictionary of Taxation”