1 time bulk withdrawal prior to establishing SEPP

L1: 1 time bulk withdrawal prior to establishing SEPP I would like to take a lump sum from my IRA for a specific purpose. I then would like to begin a qualified plan for SEPP. Is there any problem with a 10% penalized, one time, early withdrawal prior to setting up my 72 plan?2007-08-23 05:14, By: Russ, IP: [75.189.75.9]
L2: 1 time bulk withdrawal prior to establishing SEPPHello Russ:
You may certainly do so. Just make sure to keep bery good records to clearly establish which withdrawals are subject to the 10% surtax and which withdrawals are not.
TheBadger
wjstecker@wispertel.net
2007-08-23 05:48, By: TheBadger, IP: [72.42.67.12]

L2: 1 time bulk withdrawal prior to establishing SEPPAs the Badger indicated, you can do this. However, it will be easier to explain it to the IRS if you can use the earlier calendar year for the penalized distribution, and begin the SEPP in January. That way, you don”t have to explain to the IRS how much of a 1099R is pre-SEPP and how much applies to the SEPP, and show dates of all the distributions for that year.
Also, remember that your first stub year can include a full annual distribution even though you do not start your SEPP until late in the year. If the full annual happens to be enough to meet your current needs, you will avoid early withdrawal on that amount.
Obviously, your full facts and circumstances affect the utility of both of the above points.
2007-08-23 12:54, By: Alan S., IP: [24.116.165.60]