Which of the following defines a qualifying lump sum distribution?

A qualifying lump sum distribution is defined as a balance payment that is received after age 59 within one taxable year. This type of distribution generally signifies that funds are being taken from a retirement plan, such as a 401(k) or an IRA, and the individual has reached an age where retirement distributions are typically favorable from a tax perspective.

This definition is critical because it aligns with tax regulations that allow for more favorable treatment of retirement distributions once an individual reaches a certain age. Specifically, distributions made after age 59½ do not incur the early withdrawal penalty that applies to distributions taken from retirement accounts before this age, making the tax implications more advantageous for the individual.

The other options do not adequately capture the specific criteria of a qualifying lump sum distribution. For instance, distributions after age 50 do not automatically qualify as lump sums, and neither do distributions made before 59. The reference to rolling over distributions to a new employer plan also does not pertain to the concept of lump sum distributions as defined in retirement plan regulations. Hence, the focus on a balance payment received after the age of 59 within one taxable year is essential for understanding what constitutes a qualifying lump sum distribution.