Form 4972


Is used if you received a qualified lump-sum distribution from your pension plan in the current tax year and wish to choose the 20% capital gain election and/or the 10 year tax option.

If you reached the age of 50 before 1986 (the pension plan participant was born before 1936), you can elect capital gain treatment for the portion of the lump-sum distribution attributable to your participation in the plan prior to 1974. The capital gain portion is taxed at 20 percent.

If you reached the age of 50 before 1986, you can elect to spread the taxation of your lump-sum distribution over 10 years. The 10 year averaging method will usually save you a significant amount of taxes.

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