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Author: shtevo1 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121223  
Subject: lump sum distribution - subsequent years Date: 2/27/2000 1:12 PM
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can anyone tell me how to handle the forward averaging of lump sum distributions in subsequent years? I did
my folks tax return the last year when they received a 1099-R and we filled out form 4972 with 5 year forward averaging.

How does the 20% income from distribution get reflected
on tax forms in subsequent years. TurboTax doesn't seem to kick me into any additional form to request these numbers (I didn't use Turbo-Tax last year). Where does this income get recognized?

thanks in advance.

please email shtevo1@hotmail.com
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30316 of 121223
Subject: Re: lump sum distribution - subsequent years Date: 2/28/2000 3:23 PM
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<<can anyone tell me how to handle the forward averaging of lump sum distributions in subsequent years?>>

Uhh...I'm not sure what you are asking here...

<< I did
my folks tax return the last year when they received a 1099-R and we filled out form 4972 with 5 year forward averaging.>>

Ok...and if you did it correctly, you "spread out" the income over a five year period, and then you brought it back to 1998 and paid the entire tax in one year. The benefit is received by spreading the income. But all of the taxes are paid in the year that you complete Form 4972...again assuming that the form was prepared correctly.

<<How does the 20% income from distribution get reflected
on tax forms in subsequent years.>>

It doesn't. It was all paid in the year of distribution. This is not a "spread out" like a Roth IRA conversion spread out, where the actual income is spread out over a 4 year period. It's completely different. So once it's done, it's done.

<< TurboTax doesn't seem to kick me into any additional form to request these numbers (I didn't use Turbo-Tax last year). Where does this income get recognized?>>

Again, if the form was completed correctly in 1998, it's a done deal. You don't have to screw around with it in any future years.

TMF Taxes
Roy



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