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A "lump sum distribution" 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 Transfer Refund was received by
petitioner after he attained the age of 591/2, nor is there any
dispute that the Transfer Refund was distributed within a single
taxable year. Moreover, for purposes of deciding whether
petitioner received a lump sum distribution, there is no dispute
that the Retirement System is a plan described in section 401(a)
and that the trust forming a part of the Retirement System is
exempt from tax under section 501. Therefore, the only issue is
whether petitioner received the "balance to the credit" when he
received the Transfer Refund
In determining a taxpayer's "balance to the credit", section
402(e)(4)(C) provides in relevant part:
(C) Aggregation of certain trusts and plans.--For
purposes of determining the balance to the credit of an
employee under subparagraph (A)--
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Last modified: May 25, 2011