72T Scenarios

L1: 72T ScenariosScenario #1
Target Annual Distribution = $24,000
Yr 1 Starts monthly distribution in June (55 years of age)
Total Yr 1 distribtuion = $14,000 (7 x $2,000)
Yr 2-5 Withdraw $24,000
Yr 6 Takes monthly distribution thru May (59.5 years of age)
Total Yr 6 distribution = $10,000 (5 x $2,000)
Scenario #2

Target Annual Distribution = $24,000
Yr 1 Starts monthly distributions in June (55 years of age). Wants to take out the Target amount in 7 months.
($24,000 divided by 7 = $3,428.57)
Yr 2-5 Withdraw $24,000
Yr 6 Takes monthly distributions thru May (59.5 years of age)
Total Yr 6 distributions = $10,000 (5 months x $2,000)
Question 1 – In each of the independent scenarios above, does the participant satisfy the 72T requirements?
Question 2 – In year 1 does a participant who starts program mid Yr (June) have the option of pro-rating distributions or taking full yearof distribution?
Question 3 – In final year (yr 6) can the participant pro rate distributions to qualifying stop date ( 5 yrs or 59.5) or do they have to take a full years distribution?2005-12-20 09:55, By: akelly, IP: [64.218.243.147]

L2: 72T ScenariosStart by defining thedate of birth and the date of the first payment. Then make a trip to the “Last Payment Date” calculator and most of your questions will be answered depending n whether the 5-Year rule or the Age 59.5 rule applies.2005-12-20 09:59, By: Gfw, IP: [172.16.1.72]

L2: 72T ScenariosDate of Birth 10/20/1955
1st payment 6/5/2000
Calculator says 6/5/2005 is 1st modification date.
That makes sense. I guess my real confusion pertains to the difference between Scenario 1 and 2. If participant pro rates 1st year (2000) and last year (2005)(Scenario 1) that seems to fit what the calculator says. If participant takes fulldistribution in year 1 (2000) in an abbreviated timeperiod (7months) is the participant still able to pro rate 2005 (Scenario 2) or do they have to take the full distribution in the abbreviated time period (5 months).2005-12-20 10:36, By: akelly, IP: [64.218.243.147]

L2: 72T ScenariosIf I input 10/20/1955 as Date of Birth and 6/5/2000 as the firat payment date, I get a First Payment Modification Date of 4/21/2015 – the day afterage 59.5 is attained.
Attained Age on 1st Payment Date 45 5-Year Period Ends 6/4/2005 Date Age 59.5 4/20/2015 First Payment Modifiaton Date 4/21/2015 2005-12-21 05:58, By: Gfw, IP: [172.16.1.72]

L2: 72T ScenariosIT DOES NOT COMPUTE !! IF DOB WAS 10/20/1955, THEN HE WAS 45 IN 2000. IF HE WAS 55 IN 2000, WHICH I BELIEVE WAS THE CASE, THEN DOB SHOULD BE 10/20/1945 !!!!!! TRYGIVING USTHE RIGHT INFORMATION IF YOU WANT THE RIGHT ANSWER.
IN ANY CASE, I BELIEVE THAT IN THE INITIAL CALENDAR YEAR YOU CAN TAKE EITHERTHE FULL ANNUAL AMOUNT, OR AN ALLOCATED AMOUNT (AND POSSIBLY ANY AMOUNT IN BETWEEN). IN THE FINAL YEAR, I THINK YOU CAN TAKE EITHER THE FULL ANNUAL AMOUNT, OR AN ALLOCATED AMOUNT. IN THE FIRST AND LAST YEARS IT DEPENDS WHAT YOU NEED FROM A CASH FLOW AND TAXABLE INCOME STANDPOINT.2005-12-21 19:51, By: dlztaxes, IP: [4.175.9.192]

L2: 72T ScenariosSorry, DOB is in fact 10/20/45.Typo. I am only human! Thanks for input anyhow2005-12-22 09:57, By: akelly, IP: [64.218.243.177]