DEFINITION of 'Lump-Sum Distribution'
A one-time payment for the entire amount due, rather than breaking payments into smaller installments. Some lump-sum distributions receive special tax treatment.
INVESTOPEDIA EXPLAINS 'Lump-Sum Distribution'
A commission check or a pension plan distribution because of the pensioner's death are two examples of lump-sum distributions.
In general, distributions from qualified plans are treated as lump sum, if the following requirements are met:
1. The total plan balance is distributed over the same tax year.
2. The distribution is made as a result of the employee:
- attaining age 59.5
- being deceased (applicable to beneficiaries)
- separating from service (not applicable to self-employed individuals - but applies to their common-law employees) or
- being disabled (applicable only to self-employed individuals).
3. The distribution occurs after five years of participation (this requirements is waived for beneficiaries).
A one-time payment for the total or partial value of an asset. ...
As this term applies to annuities, the principal amount that ...
The specific taxes assessed on investment capital gains as determined ...
Treating lump-sum retirement-plan distributions as if they occurred ...
The amount paid to a decedent's beneficiary that is dependent ...
Distributions made from a Roth IRA that are tax and penalty free. ...