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any amount received from a qualified plan, unless it is: Made
after the employee becomes 59-1/2 years old; made to a
beneficiary after the employee's death; attributable to the
employee's being disabled; part of a series of substantially
equal payments made no less than annually for the life of
designated persons; made to an employee who is separated from
service after attaining age 55; a dividend paid with respect to a
stock described in section 404(k); made to an employee for
medical expenses in accordance with section 72(t)(2)(B); or a
payment in connection with a qualified domestic relations order
in accordance with section 72(t)(2)(C).
Because petitioner was 54 years of age as of 1990 and none
of the other exceptions set forth in the provisions of section
72(t)(2) is satisfied, petitioners are liable for an additional
10-percent tax on the early distribution.
Under section 402(e), a lump-sum distribution made after the
employee attained the age of 59-1/2 was, in certain
circumstances, eligible for income-averaging treatment.
Petitioner was just 54 years old at the time of the distribution,
which renders him ineligible for income averaging under the
express terms of section 402(e)(4)(B)(i). See Cebula v.
Commissioner, 101 T.C. 70 (1993). Moreover, as explained infra,
the distribution was not a lump sum because less than the full
balance of the account was distributed during the year.
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Last modified: May 25, 2011