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Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124138  
Subject: Re: Regrettable 401K withdrawal Date: 2/7/2000 8:42 AM
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While 5-yr averaging is no longer available, your father-in-law, having been born prior to
January 1, 1936, should be eligible for 10-year averaging if the withdrawl qualifies as a
"lump sum distribution, which is defined as payment within a one-year period of the entire
balance in the plan.

His withdrawal was in 1999 so both 5 year and 10 year averaging (and pre-1974 capital gains treatment) is still avilable if this was truly a Lump Sum Distribution. Get Form 4972 and instructions to see if it applies, because the tax savings is quite substantial. He was probably on the right track. This is a different kind of averaging than we had in the 60s. Ed
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