Form 4972 - Tax On Lump Sum Distributions
Form 4972 is used for reporting the tax on lump-sum distributions from qualified retirement plans. A lump-sum distribution is a one-time payment representing the entire balance of a qualified retirement plan that is paid to the recipient in a single tax year. This form helps calculate the tax on such distributions, which may qualify for special tax treatment.
The tax treatment of lump-sum distributions depends on several factors, including the recipient's age, the type of retirement plan, and whether the distribution is eligible for capital gain treatment.
If you receive a lump-sum distribution from a qualified retirement plan, you may need to complete Form 4972 to determine the tax liability associated with the distribution. It's important to carefully follow the instructions provided with the form or consult with a tax professional to ensure accurate completion.