2 IRAs – I SEPP & 1 IRA (if took out a pre 59

L1: 2 IRAs – I SEPP & 1 IRA (if took out a pre 59 I am age 51 and have 2 IRAs.I will be taking SEPP from one of my IRAs this year.
If I take out a lump sum amount from my other IRA next year, will I be subject to the 10% penalty on my initial SEPP (72t) distribution?

Thanks.2004-02-19 18:24, By: cheri, IP: [65.227.252.71]

L2: 2 IRAs – I SEPP & 1 IRA (if took out a pre 59 Hello Cheri:
As long as the two IRAs are kept separate you will be fine; you will owe the 10% penalty on the lump sum distribution but no on the SEPP distribution.
TheBadger
wjstecker@wispertel.net2004-02-20 07:39, By: TheBadger, IP: [12.221.34.192]

L2: 2 IRAs – I SEPP & 1 IRA (if took out a pre 59 This question brings up another, which I have foundvarying answers from different IRA Custodians. Some custodians take the position that if you have multiple Traditional IRAs with them and want to do a SEPP, then you have to include all in the calculations and distributions. Other custodians say they can treat each IRA as a separate entity and you can SEPP from one, make lump sum distributions from another, and leave the third alone. My guess is one custodian is allowed by statute to hold multiple IRAs and let you do what you want to each. (At this point I expect TheBadger is formulating his response to my legal assumption, which I do appreciate.) My guess is the custodian that treats multiple IRAs as one for SEPP purposes is really saying their computer system won’t let them do it so they blame it on the law.
Before starting your plan, check with the custodian to get theri position, and be sure document names, times and answers for possible future reference. If your custodian won’t let you do both with your two IRAs, then change custodians with the account you want to take the lump sum from. Or, if you find one custodian that will let you do both, then move the whole deal.
Good luck.
Jim2004-02-20 10:56, By: Jim, IP: [68.1.147.61]

L2: 2 IRAs – I SEPP & 1 IRA (if took out a pre 59 >>varying answers from different IRA CustodiansIt very possible that is stems from different (but not necessarily right) understandings of the subject matter and their comfort level.
There are several PLRs including PLR 9050030 that talk about not having to aggregate IRA accounts to determine contributions. Remember, as The Badger has previously stated, it”s not up to the Trustee/Custodian to make any determination except to follow the wishes of the IRA owner.
One point that The Badger and I do disagree on, is that the Trustee/Custodian is free to code the 1099 with a code other than ”2” if they don”t like, or agree with, the arrangement – then the Owner merely outlines the exception when filing their taxes. 2004-02-20 13:19, By: Gfw, IP: [12.221.34.192]