72T interest rates

L1: 72T interest ratesThe rule states that the interest rate chosen for Amortization calculation cannot exceed 120% of either of the two months FMR prior to the beginning of the distribution. Does that mean that you can select the highest rate of the previous two months. It appears that it is stating that the rate cannot exceed either which would indicate you must take the lower of the two months to make your calculations.

Thanks,
Ron2003-12-01 10:15, By: Ron, IP: [127.0.0.1]

L2: 72T interest ratesHello Ron:
I have always read RR 2002-62 to mean picking of the higher of the two rates for either of the two months preceeding the month of the 1st distribution.
TheBadger
wjstecker@wispertel.net
2003-12-01 10:22, By: TheBadger, IP: [127.0.0.1]

L2: 72T interest ratesI agree with the Badger. Below is the wording (I added teh RED) from the 2002-62 FAQ published on the IRS site. Seems pretty clear to me.How are interest rates determined? The interest rate that may be used is any interest rate that is not more than 120 percent of the federal mid-term rate (determined in accordance with section 1274(d) of the Code for either of the two months immediately preceding the month in which the distribution begins). These interest rates are published by the Service in revenue rulings;they are cumulativelyavailablewithintheIndex of Applicable Federal Rates.2003-12-01 10:49, By: Gfw, IP: [127.0.0.1]