dmb Posted March 28, 2003 Posted March 28, 2003 A participant terminated employment due to disability and died prior to receiving her distribution from a PS plan. She was not married and her beneficiary was her son. Is the lump sum distribution to the son subject to mandatory 20% withholding?? Thanks.
pmacduff Posted March 28, 2003 Posted March 28, 2003 I too am interested in the answer to this. The 20 % mandatory withholding only applies to "eligible" rollover distributions. Since the son as beneficiary is not eligible to roll, my feeling is that the mandatory withholding does not apply.
JanetM Posted March 28, 2003 Posted March 28, 2003 If the amount is taxable but can not be rolled over the mandatory tax withholding is 10%. Don't have cite handy for that. JanetM CPA, MBA
R. Butler Posted March 28, 2003 Posted March 28, 2003 3405( B )(1) is the cite for the 10% withholding. Beney can elect out of that 10% withholding.
david rigby Posted March 28, 2003 Posted March 28, 2003 IRC 3405: http://www.fourmilab.ch/ustax/www/t26-C-24-3405.html Sorry, I have no idea how well, or if, this site is maintained. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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