frequency of payments

L1: frequency of paymentsWe want to use Notice 89-25 rules (life expectancy tables, etc.) for calculating a client”s 72T distributions. Therefore, we will be using the November 30, 2002 balance as the account balance to originate the annual distribution amount ($18,248.59). His first distribution will occur on December 15, 2002. I have reviewed PLR 200105066, and so feel comfortable with distributing 1/12th of the pre-determined annual payment ($1,520.72)in December. In January of 2003, we would like to begin distributing his annual payment ($18,248.59) again, and continue to do so for the remainder of the required distribution period.
Here is where I am confused. I know that we must determine the “annual” amount. I know that the payments must be made AT LEAST annually, and that a monthly distribution is also acceptable. I also know that in PLR 200105066, the individual was allowed to only take 6 months of monthly distributions the first year since the distributions began mid year. What I don”t know…is whether we are permitted to change the frequency of the payment midway through the distribution period. (In our case, on the second distribution).
The ultimate goal of the client is to use Notice 89-25 rules so that the required beginning balance in the account is at a minimum. He wants an annual January distribution, but does not want to take the full $18, 248.59 this December. If he insists on making the first distribution in December(to take advantage of the Notice 89-25 rules), and insists on only taking a monthly amount in December, will he be required to take monthly distributions from that point on?2002-12-12 15:50, By: SHill, IP: [127.0.0.1]

L2: frequency of payments
This is one of those “gray areas” that you keep hearing about. If I were going to do what I think I understand you want to do, reduce the plan to writing with all its components.
The plan starts 12/01 with the first distribution to be made based on the 11/30 account balance. Then also in the plan, state that the next and future computation periods will be the calendar year with distributions based on the previous 12/31 balance and made in January of each year. I would also recalculate life expectancy and interest rates in each future year.
Good luck :~}
2002-12-13 16:08, By: Gfw, IP: [127.0.0.1]