change to minimum distribution calculation

L1: change to minimum distribution calculationYour help on this matter would be greatly appreciated.
I have a 55 year old client who has been taking 72t distributions since June of 2002 based upon the Amortization calculation method. Their balance of this account back in June 2002 was $288,000 and they have been taking an annual distriubtion of $19,680 ever since (monthly distributions). The account balance is now $167,000 and we would like to reduce the distributions without incurring a penalty by changing to the life expectancy methods.
My questions are: what balance do we use to calculate the minimmum distributions (end of last year, intial balance when started, current balance, etc…??): if the client has already taken 3 months worth of withdrawals for 2009, do we just reduce that from the amount that we need to take for the rest of the year or begin a new distribution from now going forward; does this reset to a new 5 year minimum plan, or will they still be able to make changes at 591/2?:
thank you for a timely answer
Marc Walters2009-03-31 15:25, By: mlbroker1, IP: [199.43.48.149]

L2: change to minimum distribution calculationGood afternoon Mark.I’ll answer your questions within your questions.
what balance do we use to calculate the minimmum distributions (end of last year, intial balance when started, current balance, etc…??) Go with “end of last year” which would be the 12-31-2008 ending balance. Each year you will recalculate based on the end of year account balance.
if the client has already taken 3 months worth of withdrawals for 2009, do we just reduce that from the amount that we need to take for the rest of the year or begin a new distribution from now going forward; Calculate the total RMD amount for 2009, then compare that figure to the amount already withdrawn in 2009. Then either withdraw the difference if you need to take more or process a 60-day rollover back into the account if too much has already been withdrawn. Alan addressed this aspect in a very recent post so read a few back.
does this reset to a new 5 year minimum plan, or will they still be able to make changes at 591/2?: No change intiming of the SEPP Plan. Keep going on the original time table. The only thing to change is the total annual withdrawal amount, which must be recalculated each year.
Jim2009-03-31 18:26, By: Jim, IP: [70.167.81.119]