Form 4972 Tax on Lump-Sum Distributions 2005. Summary: This is an example of Form 4972 (2005) with information as pertaining to the text. The line items are completed as
follows:
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“Name of recipient of distribution” field contains Mary Brown
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“Identifying number” field contains 005-00-6789
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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 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 160,000
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“10. Total taxable amount. Subtract line 9 from line 8” field contains 160,000
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“11. Current actuarial value of annuity from Form 1099-R, box 8. If none, enter 0” field contains 10,000
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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 170,000
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“17. Subtract line 16 from line 12” field contains 170,000
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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 170,000
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“20. Divide line 11 by line 12 and enter the result as a decimal (rounded to at least three places)” field contains .0588
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“22. Subtract line 21 from line 11” field contains 10,000
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“23. Multiply line 19 by 10% (.10)” field contains 17,000
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“24. Tax on amount on line 23. Use the Tax Rate Schedule in the instructions” field contains 2,917
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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 29,170
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“26. Multiply line 22 by 10% (.10)” field contains 1,000
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“27. Tax on amount on line 26. Use the Tax Rate Schedule in the instructions” field contains 110
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“28. Multiply line 27 by ten (10)” field contains 1,100
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“29. Subtract line 28 from line 25. (Multiple recipients, see instructions)” field contains 28,070
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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 41, or Form
1041, Schedule G,
line 1b, whichever applies” field contains 28,070
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