72t rollover from an existing custodial account to a new cutodial account

L1: 72t rollover from an existing custodial account to a new cutodial accountI have been in a 72t account setup for seven years, 56 at this time is it possible to rolover the accounts over to a new custodianand reset the distrubutions without paying the 10% penalty on the prior distrubtions. first distrubtion was 05/01/05 new account first distrubution would be 12/01/12. ThanksKen
2012-09-25 23:33, By: kwells56, IP: [184.226.156.211]

L2: 72t rollover from an existing custodial account to a new cutodial accountIs it possible to change custodians… Yes
Is it possible to reset the distribution without paying the 10% penalty… No. And you will also owe interest for the last 8 years of distributions.
Why would you want to reset the distributions? 2012-09-26 00:24, By: Gfw, IP: [205.178.67.189]

L3: 72t rollover from an existing custodial account to a new cutodial accountThe only possible reset you could make would be a one time change to the MD method effective 1/1/2013. That would almost certainly reduce your allowed distribution considerably.
So if you want to reduce your annual distribution, you might consider this allowed one time switch. If you want to increase your distribution, there is no way to take out additional funds without busting your plan.
If you have any IRAs that are not part of your original SEPP plan, you can use those accounts for emergency distributions that will save your SEPP. You would owe tax and penalty on the emergency distribution, but not the retroactive penalty and interest on all your prior SEPP distributions.
We might be able to offer other suggestions if we knew more about what you are trying to accomplish.
2012-09-26 00:44, By: Alan S, IP: [24.116.67.233]

L4: 72t rollover from an existing custodial account to a new cutodial accountI am attempting to eliminate the management and tradeing fees at the investment firm,I am notlooking to change the distrubutions, can it be recalculatedso the distrubtions are the same2012-09-26 02:51, By: kwells56, IP: [184.226.156.211]

L5: 72t rollover from an existing custodial account to a new cutodial accountOK, by “recalculation” I thought you wanted to change your annual distribution and so did gfw.
As long as the total amount of your distribution for the year of transfer is the same as required, you can change your investments without any limitations.
For example, if your annual distribution is 25,000 and you have taken out 18,000 from custodian A’s IRA, when you transfer the funds to a new IRA, you must be sure to take out 7,000 between the time of the transfer and the end of the year. You should let the new custodian know that you have an active 72t plan and what the total annual distribution amount is. Your distribution frequency can also change as long as the annual total distributed is correct.
If you have two IRAs included in your plan, it is best to transfer both of them since partial transfers have raised some issues with the IRS. The IRS has not clearly defined how they view a partial transfer when your plan includes more than one IRA account to begin with, but transferring both IRAs would appear to come closer to a 100% transfer than just one of them.2012-09-26 04:17, By: Alan S, IP: [24.116.67.233]

L6: 72t rollover from an existing custodial account to a new cutodial accountwould I need to recalulate or could the distrubtion be reset too match the currant account distrubtions. Thanks Ken2012-09-26 11:23, By: kwells56, IP: [173.98.23.247]

L7: 72t rollover from an existing custodial account to a new cutodial accountIf you are merely changing custodians, there is no recalculation involved.
You just have to make sure that your annual distribution from each of the custodians (new & old) equals your plans calculated annual distribution – just like you have done in each of the earlier years.
Re-read Alan’s last post.2012-09-26 11:29, By: Gfw, IP: [205.178.67.189]

L8: 72t rollover from an existing custodial account to a new cutodial accountwhat form do i need to set up the distribution Thanks Ken2012-09-27 11:38, By: kwells56, IP: [108.98.118.195]

L9: 72t rollover from an existing custodial account to a new cutodial accountWhatever form is required by the new custodian.2012-09-27 11:49, By: Gfw, IP: [205.178.67.189]

L10: 72t rollover from an existing custodial account to a new cutodial accountwould I need the document showning the calculations for the distrubtionsfrom the inception of my 72t before rolling too the new custodian. Thanks Ken2012-09-28 00:25, By: kwells56, IP: [173.99.67.145]

L11: 72t rollover from an existing custodial account to a new cutodial accountYes. Give the new custodian copies of the original documents that you used showing the IRA account numbers and balances as of whatever date you used initially.2012-09-28 00:30, By: dlzallestaxes, IP: [173.62.190.86]

L11: 72t rollover from an existing custodial account to a new cutodial accountYou need to contact the new custodian – they will tell you what their requirements are to do the transfer. Your last few questions should have been addressed with the new custodian before deciding who the new custodian would be.2012-09-28 00:31, By: Gfw, IP: [205.178.67.189]

L12: 72t rollover from an existing custodial account to a new cutodial accountIf your new custodian will not accept your existing paperwork and existing annual distribution, and will not allow you to take the remaining unpaid distribution for 2012, then you will bust your SEPP 72-T plan, at a cost of the 10% penalty on all of your distributions since you started.2012-09-28 02:09, By: dlzallestaxes, IP: [173.62.190.86]