L1: 72tIhave a client who owns 4 IRAs. She is taking 72t distributions from one of the IRAs. We used the aggregrate total of all 4 IRAs to compute her payout. Can she do an institution to institution transfer of her 3 IRA accounts to a different custodian?She is not taking distributions fromthe other 3 IRAs.
Thanks for the help.
John Mac2009-03-11 21:19, By: dweeezer, IP: [22.214.171.124]
L2: 72tYes, this is best done by direct transfer, but doing it by indirect rollover would not in itself bust the plan. After the transfer, distributions taken from any of the 3 transferred accounts are part of her 72t distributions, and the custodian will almost surely code them as “early”. This would require a Form 5329 to claim the exception for a 72t plan with respect to that particular 1099R.
This would be a good time to make sure client has copies of the original statements used for the opening balance on the 4 accounts. The documentation should then be updated to show the succeeding IRA account for each of the 3 that were transferred.
2009-03-12 01:13, By: Alan S., IP: [126.96.36.199]