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A lump sum distribution, for purposes of section 402, is
defined in section 402(e)(4)(A) as follows:
(A) Lump Sum Distribution.--For purposes of this
section * * * , the term "lump sum distribution" means
the distribution or payment within one taxable year of
the recipient of the balance to the credit of an
employee which becomes payable to the recipient--
(i) on account of the employee's death,
(ii) after the employee attains age 591/2,
(iii) on account of the employee's separation from the
service, or
(iv) after the employee has become disabled * * *
from a trust which forms a part of a plan described in
section 401(a) and which is exempt from tax under
section 501 * * *. For purposes of this subsection,
the balance to the credit of the employee does not
include the accumulated deductible employee
contributions under the plan (within the meaning of
section 72(o)(5)). [Emphasis added.]
There is no dispute that the distribution in issue was
received by petitioner after he attained the age of 591/2, nor is
there any dispute that the Retirement System is a plan described
in section 401(a) and that the trust forming a part thereof is
exempt from tax under section 501. Moreover, there is no dispute
that the Transfer Refund distribution was made within a single
taxable year. Therefore, the only issue in dispute is whether
petitioner received the "balance to the credit" when he received
the Transfer Refund.
8(...continued)
forward averaging method, id., 100 Stat. 2085, 2471, 2475.
Because of his age, petitioner falls within the scope of the
transitional rules, provided, of course, that the Transfer Refund
qualifies as a lump sum distribution. See pages 2-3, supra,
describing respondent's concession in this regard.
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Last modified: May 25, 2011