Form 4972 Tax on Lump-Sum Distributions 2005. Summary: This is an example of Form 4972 (2005) with items included as described in the text. Additionally, these line items
are also
completed:
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Under
“Name of recipient of distribution”field contains Robert C. Smith
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Under
“Identifying number”field contains 002-00-3456
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Under
“Part I: Complete this part to see if you can use Form 4972”:
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“1. Was this a distribution of a plan participant's entire balance (excluding deductible voluntary employee contributions and
certain forfeited
amounts) from all of an employer's qualified plans of one kind (pension, profit-sharing, or stock bonus)? If No, do not use
this form. YES”
checkbox checked
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“2. Did you roll over any part of the distribution? If Yes, do not use this form. NO” checkbox checked
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“3. Was this distribution paid to you as a beneficiary of a plan participant who was born before 1936? NO” checkbox checked
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“4. Were you (a) a plan participant who received this distribution, (b) born before 1936, and (c) a participant in the plan
for at least 5
years before the year of the distribution? YES” checkbox checked
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“5a. Did you use Form 4972 after 1986 for a previous distribution from your own plan? If Yes, do not use this form for a 2002
distribution from
your own plan. NO” checkbox checked
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Under
“Part II: Complete this part to choose the 20% capital gain election (see instructions)”:
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“6. Capital gain part from Form 1099-R, box 3” field contains 10,000
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“7. Multiply line 6 by 20% (.20)” field contains 2,000
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Under
“Part III: Complete this part to choose the 10-year tax option (see instructions)”:
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“8. Ordinary income from Form 1099-R, box 2a minus box 3. If you did not complete Part II, enter the taxable amount from Form
1099-R, box
2a” field contains 140,000
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“10. Total taxable amount. Subtract line 9 from line 8” field contains 140,000
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“11. Current actuarial value of annuity from Form 1099-R, box 8. If none, enter 0” field contains 0
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“12. Adjusted total taxable amount. Add lines 10 and 11. If this amount is $70,000 or more, skip lines 13 through 16, enter
this amount on line
17, and go to line 18” field contains 140,000
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“17. Subtract line 16 from line 12” field contains 140,000
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“19. Subtract line 18 from line 17. If line 11 is zero, skip lines 20 through 22 and go to line 23” field contains 140,000
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“23. Multiply line 19 by 10% (.10)” field contains 14,000
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“24. Tax on amount on line 23. Use the Tax Rate Schedule in the instructions” field contains 2,227
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“25. Multiply line 24 by ten (10). If line 11 is zero, skip lines 26 through 28, enter this amount on line 29, and go to line
30” field
contains 22,270
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“29. Subtract line 28 from line 25. (Multiple recipients, see instructions)” field contains 22,270
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“30. Tax on lump-sum distribution. Add lines 7 and 29. Also include this amount in the total on Form 1040, line 42, or Form
1041, Schedule G,
line 1b, whichever applies” field contains 24,270
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