SEPP – Is “Annual” the key?

L1: SEPP – Is “Annual” the key?Several previous postings address this issue, but the responses seem to be inconsistent. Assume the calculator indicates I can take monthly payments of $10K, or $120K annually. I would like to take my first distribution May 1, 2003. I would like to take $70K in the first distribution, then $10K on 12/1/03 making the total $80K for 8 Months. In 2004 I would like to take $10K on the first of each month. In 2005, I would like to take $60K on 1/1/05 and $60K on 6/1/05. Would I have a problem?2002-07-26 01:09, By: Confused, IP: [127.0.0.1]
L2: SEPP – Is "Annual" the key?Hello Confused:Join the group; about being confused that is. There are admittedly two schools of thought here; so let me try & paint the extremes:Most conservative: You, by implication have adopted a monthly distribution plan commencing in 5/03 of $10k per month; therefore you must take $10k per month, each and every month, for 60 months without deviation through 4/08.Most liberal: You have adopted an annual distribution plan of $120k per year further adopting that 2003 be a stub year containing only 8 months; therefore you must distribute $80k sometime in 2003; $120k in 2004/2005/2006/2007 and lastly you must distribute $40k and only $40k in the period 1/1/08 through 4/30/08; however, the timing of the distributions on an intra-year basis matters not.Being in the more liberal camp; I am of the opinion that either plan can be successfully documented and will comply with 72(t)(2)(A)(iv).RegardsTheBadgerwjstecker@wispertel.net2002-07-26 07:52, By: TheBadger, IP: [127.0.0.1]

L2: SEPP – Is "Annual" the key?This is always an interesting question. If you read one PLR, the IRS talks about “The monthly distribution amount for 2001 will be calculated as one-twelfth of the end-of-year annual distribution amount”.On the other hand, they also talk about (1990) “the twelve-month period beginning with the date you first received a distribution from your IRA may be used as the annual measuring period”.And one is not really inconsistent with the other. I would probably agree with the “annual measuring period” concept.But understand, it is a gray area and gray areas are open to interpretation. :~}2002-07-27 09:30, By: Gfw, IP: [127.0.0.1]

L2: SEPP – Is "Annual" the key?Gfw raises the whole issue of calendar year vs. fiscal year measurement. In the late 80’s and early 90’s there were several PLRs that approved a fiscal year treatment for a calendar year taxpayer; e.g. take out $60k from 7/1/x1 to 6/30/x2 & $62.4k from 7/1/x2 to 6/30/x3 and so forth: in this example assuming a 4% COLA eac fiscal year.Later in the mid-90’s the Service reversed itself in later rulings and no longer allows a fiscal year computations for a calendar year taxpayer. At the same time the Service started approving “stub year” rulings for the fist year of SEPPs. This has the general effect of pushing everyone to calendat year; e.g. 12/31/xx computations.TheBadgerwjstecker@wispertel.net2002-07-27 13:55, By: TheBadger, IP: [127.0.0.1]