Nonqualifying Distributions Sample Clauses

The Nonqualifying Distributions clause defines the treatment of distributions that do not meet certain specified criteria, often in the context of tax-advantaged plans or investment agreements. Typically, this clause outlines the consequences or penalties that apply when funds are withdrawn or distributed in a manner that does not qualify under the plan’s rules, such as early withdrawals from retirement accounts or distributions not meeting holding period requirements. Its core practical function is to deter improper or premature distributions by imposing additional taxes, penalties, or forfeitures, thereby ensuring compliance with the intended use of the plan or agreement.
Nonqualifying Distributions. If a designated beneficiary withdraws amounts from a ▇▇▇▇▇▇▇▇▇ ESA that exceed the qualified education expenses for the same year, or the distributions are not used for qualified education expenses, a portion of the distributions will be taxable. The amount in excess of the qualified education expenses is taxable pro rata, based on the earnings and the basis in the account. In most cases of a nonqualified distribution, the taxable portion of a ▇▇▇▇▇▇▇▇▇ ESA distribution is also subject to an additional 10 percent penalty tax. There are several exceptions to the 10 percent penalty tax including distributions made payable a. to a designated death beneficiary of the ▇▇▇▇▇▇▇▇▇ ESA or to the estate of the designated beneficiary following the death of the designated beneficiary; b. to the designated beneficiary if the designated beneficiary is disabled; c. to the designated beneficiary if the designated beneficiary received a qualified scholarship, an educational assistance allowance or an excludable payment exception, but only to the extent the distribution is not more than the amount of the scholarship, allowance or excludable payment, and d. to the designated beneficiary as a removal of excess along with the net income attributable.
View SourceView Similar (26)
Nonqualifying Distributions. If a Designated Beneficiary withdraws amounts from a ▇▇▇▇▇▇▇▇▇ ESA which exceed the qualified education expenses for the same year, or the distributions are not used for qualified education expenses, a portion of the distributions will be taxable. The amount in excess of the qualified education expenses is taxable pro rata, based on the earnings and the basis in the account. a. To a designated death beneficiary of the ▇▇▇▇▇▇▇▇▇ ESA or to the estate of the Designated Beneficiary following the death of the Designated Beneficiary; b. To the Designated Beneficiary if the Designated Benefi- ciary is disabled; c. To the Designated Beneficiary if the Designated ▇▇▇- ▇▇▇▇▇▇▇▇ received a qualified scholarship, an educational assistance allowance, or an excludable payment excep- tion, but only to the extent the distribution is not more than the amount of the scholarship, allowance, or excludable payment, and d. To the Designated Beneficiary as a removal of excess along with the net income attributable.
View Source

Related to Nonqualifying Distributions

  • Nonqualified Distributions If you do not meet the requirements for a qualified distribution, any earnings you withdraw from your ▇▇▇▇ ▇▇▇ will be included in your gross income and, if you are under age 59½, may be subject to an early distribution penalty tax. However, when you take a distribution, the amounts you contributed annually to any ▇▇▇▇ ▇▇▇ and any military death gratuity or Servicemembers’ Group Life Insurance (SGLI) payments that you rolled over to a ▇▇▇▇ ▇▇▇, will be deemed to be removed first, followed by conversion and employer-sponsored retirement plan rollover contributions made to any ▇▇▇▇ ▇▇▇ on a first-in, first-out basis. Therefore, your nonqualified distributions will not be taxable to you until your withdrawals exceed the amount of your annual contributions, military death gratuity or SGLI payments and your conversions and employer-sponsored retirement plan rollovers.

  • Award Distribution In the event Lessor accepts Lessee's offer to purchase the Leased Property, or to substitute a new property for the Leased Property, as described in clause (b) of Section 15.4, the entire Award shall belong to Lessee provided no event of default is continuing and Lessor agrees to assign to Lessee all of its rights thereto. In any other event, the entire Award shall belong to and be paid to Lessor, except that, if this Lease is terminated, and subject to the rights of the Facility Mortgagee, Lessee shall be entitled to receive from the Award, if and to the extent such Award specifically includes such items, the following: (a) A sum attributable to the Capital Additions for which Lessee would be entitled to reimbursement at the end of the Term pursuant to the provisions of Section 10.2(c) and the value, if any, of the leasehold interest of Lessee under this Lease; and (b) A sum attributable to Lessee's Personal Property and any reasonable removal and relocation costs included in the Award. If Lessee is required or elects to restore the Facility, Lessor agrees that, subject to the rights of the Facility Mortgagees, its portion of the Award shall be used for such restoration and it shall hold such portion of the Award in trust, for application to the cost of the restoration.

  • Elective Distributions in Cash or Shares Whenever the Company intends to distribute a dividend payable at the election of the holders of Shares in cash or in additional Shares, the Company shall give notice thereof to the Depositary at least 30 days prior to the proposed distribution stating whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon receipt of notice indicating that the Company wishes such elective distribution to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such elective distribution available to the Holders of ADSs. The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution is available to Holders of ADRs, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 hereof (including, without limitation, any legal opinions of counsel in any applicable jurisdiction that the Depositary in its reasonable discretion may request, at the expense of the Company) and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable. If the above conditions are not satisfied, the Depositary shall, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is made in the local market in respect of the Shares for which no election is made, either cash upon the terms described in Section 4.1 hereof or additional ADSs representing such additional Shares upon the terms described in Section 4.2 hereof. If the above conditions are satisfied, the Depositary shall establish an ADS Record Date (on the terms described in Section 4.7 hereof) and establish procedures to enable Holders to elect the receipt of the proposed dividend in cash or in additional ADSs. The Company shall assist the Depositary in establishing such procedures to the extent necessary. Subject to Section 5.9 hereof, if a Holder elects to receive the proposed dividend in cash, the dividend shall be distributed upon the terms described in Section 4.1 hereof or in ADSs, the dividend shall be distributed upon the terms described in Section 4.2 hereof. Nothing herein shall obligate the Depositary to make available to Holders a method to receive the elective dividend in Shares (rather than ADSs). There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.

  • Nonqualified Stock Options If the Shares are held for more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long term capital gain.

  • Share Distributions Upon the timely receipt by the Depositary of a notice from the Company that it intends to make a distribution that consists of a dividend in, or free distribution of Shares, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement. Upon receipt of confirmation from the Custodian of the receipt of the Shares so distributed by the Company, the Depositary shall either (i) subject to Section 5.9 of the Deposit Agreement, distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Shares received as such dividend, or free distribution, subject to the other terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes), or (ii) if additional ADSs are not so distributed, take all actions necessary so that each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional integral number of Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary, and (b) taxes). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares or ADSs, as the case may be, represented by the aggregate of such fractions and distribute the net proceeds upon the terms described in Section 4.1 of the Deposit Agreement.