Re-Calculation 101

L1: Re-Calculation 101After reading TheBadger’s info on re-calculation and reviewing some other articles on the subject, I am now confused by the timing of the pertinent details for the re-calculation.For example, other articles I have read indicate that re-calculation needs to be calculated one year from the start of the initial calculation using the current account balance date and the same type۝ of interest rate used in the initial calculation. If the initial calculation is based on the account balance as of 6/30/2004 and 120% of the mid-term rate as of June 2004 is used, then the annual re-calculation will be based on the 6/30/2005 balance and 120% of the mid-term rate as of June 2005. Of course, the June 2005 calculation will reflect one year older. The date of the account valuation and interest rate would be updated on an annual basis FROM the first calculation date.The PLR’s issued on the subject would seen to confirm the annual۝ dates and interest rates. Also, I was not aware of the requirement that distributions in any one year cannot precede the annual re-calculation. If the IRS is only concerned with amounts withdrawn on an annual basis, why would this be an issue as long as the total amount withdrawn during the calendar year was in accordance with the re-calculation.Any comments ???
2005-05-05 17:15, By: K-C, IP: [24.145.164.87]

L2: Re-Calculation 101One point to remember is that each PLR is based on the facts and circumstances for each individual taxpayer. Any plan that incorporates recalculation (as per my earlier post) should identify all assumptions, including the date on which calculation will occur and the date on which assets will be valued.
The first year of a SEPP may be a short year or a full year. A plan that starts in July and uses each 12/31 as a date for asset valuation, 1/1 as a re-calculation date and the 120% mid-term rate that coincides with the valuation date should have no problems and would be very similar in operation to a SEPP that was initiated using the Minimum Distribution method.2005-05-07 06:10, By: Gfw, IP: [216.80.64.228]