DEFINITION of 'LumpSum Distribution'
A onetime payment for the entire amount due, rather than breaking payments into smaller installments. Some lumpsum distributions receive special tax treatment.
BREAKING DOWN 'LumpSum Distribution'
A commission check or a pension plan distribution because of the pensioner's death are two examples of lumpsum 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 selfemployed individuals  but applies to their commonlaw employees) or
 being disabled (applicable only to selfemployed individuals).
3. The distribution occurs after five years of participation (this requirements is waived for beneficiaries).

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