72T annual distributions
L1: 72T annual distributions
I have set up (3) IRA accounts for a SEPP to start on 9/29/2011. Birthdate 9/18/1957. The accounts were funded in June 2011.
Can I take an annual distribution payment in Sept 2011. In other words can I take a full year distribution for 2011 even though the IRA wasestablished in June 2011??
2011-09-13 17:08, By: Bill, IP: [184.108.40.206]
L2: 72T annual distributions
You have 2 options… take a full annual distribution or take 4/12s of the annual distribution. Just make sure that you used the right interest rate in your calculations for a September start.
2011-09-13 17:19, By: Gfw, IP: [220.127.116.11]
L3: 72T annual distributions
CLARIFICATION — The 4/12ths is a result of starting in Sept 2011 with the first distribution. The date that you “set it up ” is immaterial from that standpoint.
As far as the gist of your question, you can take a full year’s distribution even if the first one is in December.
2011-09-13 17:34, By: dlzallestaxes, IP: [18.104.22.168]
L4: 72T annual distributions
I agree with the above. What the “setup date” does do is establish a maximum look back date for the account balance you will use for your calculation. Since 3 IRA accounts are intended to be included in your plan (aka “SEPP universe”),
you cannot go back before the latest date established of the 3 accounts.
If you use a 6/30 date, it will probably generate a higher distribution than later dates if you have equity investments in any of these IRAs because the market has steadily dropped since the end of June.
You can take your SEPP distributions in any combinationfrom the 3 accounts, but using more than one means extra 1099R forms.
You may want to think about spinning off one account to use for emergency needs outside the SEPP, but if you do that then your account balance for the calculation must be after the spin off date.
2011-09-13 18:08, By: Alan S., IP: [22.214.171.124]