Distributions from Qualified Plans — Taxation and Qualification (Portfolio 370)

Description

Bloomberg Tax Portfolio, Distributions from Qualified Plans — Taxation and Qualification, No. 370, discusses the income, excise and withholding tax issues relating to various types of distributions made from qualified retirement plans.

Part I of this Portfolio provides a brief overview of the taxation of qualified plan distributions. Part II distinguishes between the lump-sum and annuity and installment forms of distribution and discusses the treatment of distributions of property in-kind. Part III discusses the income tax treatment of various types of distributions, including plan loans, hardship withdrawals and distributions made pursuant to qualified domestic relations orders (QDROs), that can be made during the participant’s active employment. Part IV examines the income tax treatment of distributions made at termination of employment. Part V discusses the income tax treatment of distributions made in the event of termination of the plan. Part VI describes certain tax treatment that occurs in the event of plan disqualification. Part VII discusses the treatment of distributions that occur as a result of a merger or acquisition involving the plan sponsor. Part VIII analyzes methods of deferring income tax on a qualified plan distribution, such as direct plan transfers and tax-free rollovers. Part IX examines the §401(a)(9) required minimum distribution rules. Part X describes the types of distributions and amount of such distributions subject to income tax withholding under §3405, specific issues regarding federal estate taxation of qualified plan distributions, the additional income tax on early distributions under §72(t), and the §4974 excise tax on the failure to make required minimum distributions.

Table of Contents

I. Introduction
II. Form of Distribution
III. In-Service Distributions
IV. Distributions at Termination of Service
V. Distributions Upon Plan Termination
VI. Tax Consequences Upon Plan Disqualification
VII. Distributions Upon Merger/Acquisition of Plan Sponsor
VIII. Tax-Free Rollovers
IX. Required Plan Distributions
X. Special Taxation Rules