Non-Qualified Distributions Sample Clauses

Non-Qualified Distributions. If a Designated Beneficiary withdraws an amount from a Xxxxxxxxx ESA and does not have any Qualified Education Expenses during the year, the amount of the withdrawal is taxable to the Designated Beneficiary. The taxable portion of the distribution is the portion that represents earnings in the Xxxxxxxxx ESA. The earnings portion of a Non-qualified Distribution is also subject to an additional 10% tax, unless an exception applies.
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Non-Qualified Distributions. If you receive a distribution from your Xxxx XXX that does not constitute a qualified distribution, a portion of it may be taxable and may be subject to the 10% premature distribution penalty tax (if you do not qualify for an exception). You must apply the special “ordering” rules discussed above to determine whether part of your non-qualified distribution represents a taxable amount. Non-qualified distributions of conversion amounts distributed within five years of the conversion may be subject to the 10% premature distribution penalty tax, explained below.
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Non-Qualified Distributions. A distribution that does not meet the requirements for a Qualified Distribu- tion will be considered a Non-Qualified Distribution by the IRS. The earnings portion of a Non-Qualified Distribution will be subject to federal income taxes (an may be subject to other taxes) and will be taxable to the person receiving the distribution. In addition, Non- Qualified Distributions are subject to a 10 percent federal tax penalty on earnings. The person receiving the distribution is subject to IRS require- ments, including filing applicable forms with the IRS. Although we will report the earnings portion of all distributions, it is your responsibility to calculate and report any tax liability and to substan- tiate any exemption from tax and/or penalty. In accordance with Section 529, the earnings portion of a non-qualified distribution is treated as income to the distributee and is subject to federal and any applicable state income taxes as well as an additional 10 percent federal tax penalty. Although the Program Manager will report the earnings por- tion of all distributions to the IRS, it is the final responsibility of the Account Owner to calculate and report any tax liability and to substantiate any exemp- tion from tax and/or penalty.
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Non-Qualified Distributions. Amounts distributed from a Xxxx 403(b) Contributions Account that are not “Qualified Distributions” as defined in Section 10.3(a), may be distributed from a Xxxx 403(b) Contributions Account subject to the distribution rules applicable to Elective Deferrals as described in Section 5.1. Such nonqualified distributions shall be subject to federal income tax to the extent that the amount distributed exceeds the value of the Xxxx 403(b) Contributions.
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Non-Qualified Distributions. If you do not meet the requirements for a qualified distribution, any earnings you withdraw from your Xxxx XXX will be included in your gross income and, if you are under age 59 1⁄2, may be subject to an early distribution penalty. However, when you take a distribution, the amounts you contributed annually to any Xxxx XXX Account will be deemed to be removed first, followed by conversion contributions made to any Xxxx XXX on a first-in, first-out basis. Therefore, your non-qualified distributions will not be taxable to you until your withdrawals exceed the amount of your annual contributions and your conversion contributions. However, the 10 percent early distribution penalty may apply to conversion contributions distributed within the five-year period beginning with the year in which the conversion occurred. These “ordering rules” are complex. If you have any questions regarding the taxation of distributions from your Xxxx XXX, please see a competent tax advisor.
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Non-Qualified Distributions. If you receive a distribution from your Xxxx XXX that does not constitute a qualified distribution, a portion of it may be taxable and may be subject to the 10% premature distribution penalty tax (if you do not qualify for an exception). You must apply the special “ordering” rules discussed above to determine whether part of your non-qualified distribution represents a taxable amount. Non-qualified distributions of conversion amounts distributed within five years of the conversion may be subject to the 10% premature distribution penalty tax, explained below. Distributions Prior to Age 59½ Exempt from 10% Penalty Tax. The 10% penalty tax on premature distributions does not apply to distributions made to you before you attain age 59½ for any of the following reasons:
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Non-Qualified Distributions. A Distribution that does not meet the requirements for a Qualified Distribution will be considered a Non-Qualified Distribution by the IRS and subject to the 10% Penalty and federal and applicable state income taxes. Closing an Account You may cancel your Participation Agreement and close your Account at any time by written notice to the Program Manager, accompanied by the appropriate Withdrawal form. Termination of Account with Penalty OTTA, on behalf of the Trust Fund, or the Program Manager may terminate any Account if it finds that the Account Owner or the Beneficiary has provided false or misleading information. Upon such a termination, OTTA may withhold, and the Account Owner and the Beneficiary shall forfeit if OTTA so withholds, all earnings on principal investments accumulated in the Account at the time of such termination, or such lesser amount as XXXX xxxxx necessary in its discretion in light of such false or misleading information.
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Non-Qualified Distributions. If you do not meet the requirements for a qualified distribution, any earnings you withdraw from your Xxxx XXX will be to an early distribution penalty. However, when you take a distribution, the amounts you contributed annually to any Xxxx XXX Account will be deemed to be removed first, followed by conversion contributions made to any Xxxx XXX on a first-in, first-out basis. Therefore, your non-qualified distributions will not be taxable to you until your withdrawals exceed the amount of your annual contributions and your conversion contributions. However, the 10 percent early distribution penalty may apply to conversion contributions distributed within the five-year period beginning with the year in which the questions regarding the taxation of distributions from your Xxxx XXX, please see a competent tax advisor.
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Non-Qualified Distributions. If your withdrawal of Xxxx XXX invest- ment earnings is not a qualified distribution, then those earnings are taxable as ordinary income in the year received. They are also subject to the 10% penalty tax on early distributions, if applicable. (See item 5(f).) However, federal tax rules established an order of priority for amounts withdrawn. Withdrawals from Xxxx IRAs are treated as coming from regular contributions first. Next, they are treated as coming from con- version contributions on a first-in-first-out basis. Only after the total amount withdrawn exceeds the amount of contributions to all of your Xxxx IRAs will the withdrawal be attributed to investment earnings subject to ordinary income tax (as a non-qualified distribution).
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Related to Non-Qualified Distributions

  • Required Distributions Generally, when you die, designated beneficiary(ies) who are individuals may elect to deplete the Xxxx XXX by the end of the fifth calendar year following your death or to receive payments based on the designated beneficiary(ies)’s life expectancy. If life expectancy payments are elected, the payments must generally begin by December 31 of the first calendar year following your death. If your surviving spouse is your sole designated beneficiary, he or she may delay the first distribution until December 31 of the year you would have attained age 70½, if later. If your designated beneficiary is not an individual or qualified trust (e.g., a charity, your estate, etc.), your Xxxx XXX must be distributed by the end of the fifth calendar year following your death. Generally, each beneficiary may elect the timing and manner regarding the distribution of his or her portion of the Xxxx XXX. Elections must generally be made by December 31 of the year following your death. If timely elections are not made, distributions to designated beneficiaries who are individuals will be made using the life expectancy option. The default provision for designated beneficiaries that are not individuals is the 5-year method. If your beneficiary(ies) fails to withdraw the required amount in any tax year, he or she may be subject to a 50% excess accumulation penalty tax on the amount that should have been withdrawn but was not distributed. If your surviving spouse is the sole designated beneficiary of your Xxxx XXX, he/she may treat your Xxxx XXX as his or her own Xxxx XXX by redesignating your Xxxx XXX as his or her own Xxxx XXX, failing to take a required distribution as a beneficiary, or by making a contribution. Regardless of whether your spouse is your sole designated beneficiary, he or she may roll distributions from your Xxxx XXX into his or her own Xxxx XXX generally within 60 days of receipt. Additional restrictions may apply. CUSTODIAN NOT YOUR ADVISOR UMB Bank, n.a., UMB Distribution Services, LLC, Grand Distributions Services, LLC, and UMB Fund Services, Inc. expressly disclaim any right, duty, authority or responsibility to furnish legal or tax advice relating to your IRA, including but not limited to present or future tax consequences to you or others which may result from the establishment or maintenance of the Custodial Account, the permissible amounts or deductibility of contributions, the effect of withdrawals, the selection of payment options or beneficiaries, any matters pertaining to prohibited transactions, and any other matter whatsoever. You are advised and encouraged to consult with professional counsel of your own selection respecting all such matters.

  • Qualified Reservist Distributions If you are a qualified reservist member called to active duty for more than 179 days or an indefinite period, the payments you take from your IRA during the active duty period are not subject to the 10 percent early distribution penalty tax. 10) Qualified birth or adoption. Payments from your IRA for the birth of your child or the adoption of an eligible adoptee will not be subject to the 10 percent early distribution penalty tax if the distribution is taken during the one-year period beginning on the date of birth of your child or the date on which your legal adoption of an eligible adoptee is finalized. An eligible adoptee means any individual (other than your spouse’s child) who has not attained age 18 or is physically or mentally incapable of self-support. The aggregate amount you may take for this reason may not exceed $5,000 for each birth or adoption. You must file IRS Form 5329 along with your income tax return to the IRS to report and remit any additional taxes or to claim a penalty tax exception.

  • Qualified Charitable Distributions If you are age 70½ or older, you may take tax-free Xxxx XXX distributions of up to $100,000 per year and have these distributions paid directly to certain charitable organizations. Special tax rules may apply. For further detailed information and effective dates you may obtain IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs), from the IRS or refer to the IRS website at xxx.xxx.xxx.

  • When Must Distributions from a Traditional IRA Begin You must begin receiving the assets in your account no later than April 1 following the calendar year in which you reach RMD age.

  • How Are Distributions From a Traditional IRA Taxed for Federal Income Tax Purposes Amounts distributed to you are generally includable in your gross income in the taxable year you receive them and are taxable as ordinary income. To the extent, however, that any part of a distribution constitutes a return of your nondeductible contributions, it will not be included in your income. The amount of any distribution excludable from income is the portion that bears the same ratio as your aggregate non-deductible contributions bear to the balance of your Traditional IRA at the end of the year (calculated after adding back distributions during the year). For this purpose, all of your Traditional IRAs are treated as a single Traditional IRA. Furthermore, all distributions from a Traditional IRA during a taxable year are to be treated as one distribution. The aggregate amount of distributions excludable from income for all years cannot exceed the aggregate non-deductible contributions for all calendar years. You must elect the withholding treatment of your distribution, as described in paragraph 22 below. No distribution to you or anyone else from a Traditional IRA can qualify for capital gains treatment under the federal income tax laws. Similarly, you are not entitled to the special five- or ten-year averaging rule for lump-sum distributions that may be available to persons receiving distributions from certain other types of retirement plans. Historically, so-called “excess distributions” to you as well as “excess accumulations” remaining in your account as of your date of death were subject to additional taxes. These additional taxes no longer apply. Any distribution that is properly rolled over will not be includable in your gross income.

  • Investment of Contributions At the direction of the Designated Beneficiary (or the direction of the Depositor or the Responsible Individual, whichever applies) the Custodian shall invest all contributions to the account and earnings thereon in investments acceptable to the Custodian, which may include marketable securities traded on a recognized exchange or "over the counter" (excluding any securities issued by the Custodian), covered call options, certificates of deposit, and other investments to which the Custodian consents, in such amounts as are specifically selected and specified in orders to the Custodian in such form as may be acceptable to the Custodian, without any duty to diversify and without regard to whether such property is authorized by the laws of any jurisdiction as a custodial account investment. The Custodian shall be responsible for the execution of such orders and for maintaining adequate records thereof. However, if any such orders are not received as required, or, if received, are unclear in the opinion of the Custodian, all or a portion of the contribution may be held uninvested without liability for loss of income or appreciation, and without liability for interest pending receipt of such orders or clarification, or the contribution may be returned. The Custodian may, but need not, establish programs under which cash deposits in excess of a minimum set by it will be periodically and automatically invested in interest-bearing investment funds. The Custodian shall have no duty other than to follow the written investment directions of the Designated Beneficiary (or the Depositor or Responsible Individual), and shall be under no duty to question said instructions and shall not be liable for any investment losses sustained by the Designated Beneficiary.

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