NUA and Lump Sum distributions

[Guest Stenli]

Can a full distribution taken after a new triggering event qualify as a lump sum distribution? I took an inservice distribution from my 401k plan three years ago and now I have retired. A friend of mine told me that I can still do NUA on my company stock because I now have had a triggering event occur and it would be considered a lump sum. Is this true?

[Guest Harry O]

Yes, a lump sum is generally a total distribution following a triggering event (typically attainment of age 59.5 or termination of employment). If the first distribution you will receive after terminating employment is a lump sum, you have a lump sum that should qualify for NUA. Check with your employer and see how they will code the Form 1099R -- make sure that it will be coded as a lump sum and will report NUA.