MINIMUM INTEREST RATE ALLOWABLE

L1: MINIMUM INTEREST RATE ALLOWABLEWhat would be considered the minimal interest rate acceptable to the IRS using the amortization method? I would like to use 4 percent. Any thoughts or private letter rulings on this?2002-03-05 16:14, By: Sculptor, IP: [127.0.0.1]
L2: RE: MINIMUM INTEREST RATE ALLOWABLEAll of the applicable IRS pronouncements (Notices & PLR’s) use language like: “interest used…such that…it does not result in the circumvention of 72(t)(2)(A)(iv) and 72(t)(4)”Bottom line is the IRS is trying to set an upper limit but no lower limit. Thus, IMHO, 4% is just fine.However, taxpayers who want a low interest rate typically have one or IRAs, that when coupled with a method, interest rate & life expectancy results in too large of an annual distribution to meet one’s needs. This is, on its face, good news. However, you might want to consider choosing a higher interest rate, say 6.5% or 7% and splitting the “big IRA” into two smaller ones, holding one on the side for future uncertainties.TheBadger2002-03-05 19:29, By: TheBadger, IP: [127.0.0.1]

L2: RE: MINIMUM INTEREST RATE ALLOWABLEThanks Badger- your info sounds solid2002-03-10 19:50, By: Sculptor, IP: [127.0.0.1]