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Life insurance contract. You can’t roll over a life insur- ance contract from a qualified plan into a traditional IRA. Distributions received by a surviving spouse. If you receive an eligible rollover distribution (defined earlier) from your deceased spouse's eligible retirement plan (de- fined earlier), you can roll over part or all of it into a tradi- tional IRA. You can also roll over all or any part of a distri- bution of DECs. Distributions under divorce or similar proceedings (alternate payees). If you are the spouse or former spouse of an employee and you receive a distribution from a qualified retirement plan as a result of divorce or similar proceedings, you may be able to roll over all or part of it into a traditional IRA. To qualify, the distribution must be: • One that would have been an eligible rollover distribu- tion (defined earlier) if it had been made to the em- ployee, and • Made under a qualified domestic relations order. Qualified domestic relations order. A domestic rela- tions order is a judgment, decree, or order (including ap- proval of a property settlement agreement) that is issued under the domestic relations law of a state. A “qualified domestic relations order” gives to an alternate payee (a spouse, former spouse, child, or dependent of a partici- pant in a retirement plan) the right to receive all or part of the benefits that would be payable to a participant under the plan. The order requires certain specific information, and it can’t alter the amount or form of the benefits of the plan. Tax treatment if all of an eligible distribution isn’t rolled over. Any part of an eligible rollover distribution that you keep is taxable in the year you receive it. If you don’t roll over any of it, special rules for lump-sum distribu- tions may apply. See Lump-Sum Distributions under Tax- ation of Nonperiodic Payments in Pub. 575. The 10% ad- ditional tax on early distributions, discussed later under What Acts Result in Penalties or Additional Taxes, doesn’t apply. Keogh plans and rollovers. If you are self-employed, you are generally treated as an employee for rollover pur- poses. Consequently, if you receive an eligible rollover distribution from a Keogh plan (a qualified plan with at least one self-employed participant), you can roll over all or part of the distribution (including a lump-sum distribu- tion) into a traditional IRA. For information on lump-sum distributions, see Lump-Sum Distributions under Taxation of Nonperiodic Payments in Pub. 575. More information. For more information about Keogh plans, see chapter 4 of Pub. 560. Distribution from a tax-sheltered annuity. If you re- ceive an eligible rollover distribution from a tax-sheltered annuity plan (section 403(b) plan), you can roll it over into a traditional IRA. Receipt of property other than money. If you re- ceive property other than money, you can sell the property and roll over the proceeds as discussed earlier. Rollover from bond purchase plan. If you redeem re- tirement bonds that were distributed to you under a quali- fied bond purchase plan, you can roll over tax free into a traditional IRA the part of the amount you receive that is more than your basis in the retirement bonds. Reporting rollovers from employer plans. Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 4a; or Form 1040NR, line 17a. This amount should be shown in box 1 of Form 1099-R. From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. From that result, subtract the amount that was rolled over either directly or within 60 days of re- ceiving the distribution. Enter the remaining amount, even if zero, on Form 1040, line 4b; or Form 1040NR, line 17b. Also, enter "Rollover" next to line 4b of Form 1040; or line 17b of Form 1040NR. Rollover of Airline Payments If you are a qualified airline employee (defined below) and you received any airline payment(s) (defined below), you may be able to exclude from income a portion of any pay- ment(s) received that are rolled over to a traditional IRA. The maximum amount that can be rolled over to a tradi- tional IRA is 90% of the total airline payment(s) received. The rollover to a traditional IRA must be done within 180 days of receipt of the airline payment. For 2018, report any airline payment(s) you received in income on Form 1040 or Form 1040NR. For example, if you received a Form W-2 with airline payment amounts reported in box 1, the full amount should be included on Form 1040, line 1; or Form 1040NR, line 8. Up to 90% of all airline payment(s) received may be excluded from in- come if rolled over to a traditional IRA. To exclude these airline payment rollover amounts for 2018, you must in- clude the amount rolled over on Schedule 1 (Form 1040), line 21; or Form 1040NR, line 21, as a negative amount and write “airline payment” on the dotted line next to line 21. Example. John, a qualified airline employee, received an airline payment in the amount of $1,000 on January 14, 2018. John rolled over $900 (90%) of the airline payment received to a traditional IRA on March 18, 2018 (within 180 days of receipt). John received a Form W-2 for 2018 with $1,000 reported in box 1 (amount of airline payment). The $1,000 airline payment received (Form W-2, box 1) is reported on Form 1040, line 1. The $900 rollover is repor- ted as a negative amount on Schedule 1 (Form 1040), line 21. John must also write “airline payment” on the dot- ted line next to line 21. Amending a return. If you are excluding airline pay- ments from gross income for an earlier year, you will need to file Form 1040X, Amended U.S. Individual Income Tax Chapter 1 Traditional IRAs Page 27