reasonable interest rate

L1: reasonable interest rateI see that the IRS defines a reasonable interest rate at about 5.26% for November. My question is when I calculate the payout from my 72t can I use a lesser rate, say 4.25% and if so do I have to report it to the IRS ?Thanks in advance.
Coaster
2007-11-06 09:31, By: Coaster, IP: [216.119.0.205]

L2: reasonable interest rateThe 120% mid term rate is the maximum, but you can go lower if you want. Just document your calculations so that all your assumptions will be available if there is an inquiry. You do not have to report your rate to the IRS unless requested.
HOWEVER, you will have better future flexibility if you use the maximum rate, then reduce your account balance by partitioning your IRAs before you start the 72t. That will leave you with the 72t distribution you want, but also with a lower IRA balance in your 72t IRA and a higher balance in a separate IRA account outside the 72t that can be used for emergencies or even to start a second 72t plan at a later date. In summary, that strategy provides you with added safety from busting your plan.
2007-11-06 11:03, By: Alan S., IP: [24.116.165.60]

L2: reasonable interest rateJust curious, two questions.
1) I there any limit between the number of ”partitioned” IRA accounts that are allowed for SEPP treatment?
2) If you fail to follow the rules on one, does it effect all others from IRS viewpoint?

Thanks.2007-11-06 22:12, By: sjrepka, IP: [70.101.182.208]

L2: reasonable interest rateNo limit on number of SEPP 72-t Accounts.
Each are independent, and have no bearing on the others. Busting one does not affect any others.2007-11-07 10:45, By: dlzallestaxes, IP: [141.152.249.250]