onetime change to RMD calculation

L1: onetime change to RMD calculationMy question is regading the new 2002-62 rule allowing the client to make a onetime change from either the amortization or the annuitization method to the rmd method. Are they required to complete for the entire year of 2003 and then make the changes effective to begin in January 2004 or can they make changes at anytime during the year? If they are allowed to change say during the month of July do we just us the value of the account for that month or do we us the figure for 12/31 of the previous year?
Thanks for you help2003-09-09 12:09, By: onetime, IP: [127.0.0.1]

L2: onetime change to RMD calculationHello onetime:
There are at least three ways to think through / execute a change to the RMD method:
1. The easiest; at any year-end; simply value the account; divide by the appropriate life expectancy and distribute accordingly going forward.
2. At mid-year; back up to 12/31/xx previous, do the same math as (1) above to compute a total year’s worth of distributions for the current year; subtract distributions YTD and distribute the remaining balance before years-end.
3. What if (2) above results in a negative number? Some beleive, including me, that if the original SEPP plan started before 12/31/02; then a prorata mid-year switch is also premitted; e.g. value the account @ 6/30/xx (just to pick a month-end); do the same math as (1) above and divide by 2 in this case & distribute that amount sometime between 7/1/xx and 12/31/xx; then revalue at 12/31/xx to get the next year’s distribution amount.
TheBadger
wjstecker@wispertel.net
2003-09-09 12:22, By: TheBadger, IP: [127.0.0.1]