Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
<<In his article on this site about lump sum withdrawals of retirement funds, Roy Lewis included this text:

"The 5-year forward-averaging rules were repealed by the Small Business Job Protection Act,effective for tax year 2000 (that is…1999 was potentially your last bite at the apple).However, all isn't lost yet... there are certain transitional rules that may still help you save some tax dollars.">>

Right...looks like what I wrote, by cracky!!

<<I am looking to find more information about the "transitional rules" and the IRS publications aren't very helpful. Any suggestions would be very welcome.>>

Have you checked out IRS Pub 575? That provides the best information with respect to the lump sum rules, and should also mention the transitional rule.

But, very simply, the transitional rule permits participants (and their estates, trust, or beneficiaries) who were age 50 before January 1, 1986, to elect ten-year averaging even though the participant had not reached 59 1/2 years of age at that time. (Section 1122(h)(5), TRA 1986).

This transition rule continues, even though five-year averaging expires for tax years beginning after December 31, 1999. (Section 1401(c)(2), Small Business Job Protection Act of 1996.)

So, while this isn't much hope, it could provide some relief under limited circumstances.

Hope this helps...
TMF Taxes

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.