72T One Time Change Of Distribution

You are here:
< Back

L1: 72T One Time Change Of DistributionHi,
We have a client that is using the amortized 72t option and we want to makeour one time change to the amount. How do we determine what amount we arethen allowed to use? Is it the minimum distribution amount or a newamortized amount using the federal mid term rate? Also, once we make thechange, does it mean we have to use that amount for another 5 years or arewe still just finishing up the original 5 years?2004-03-18 09:57, By: Andy, IP: [207.98.195.39]

L2: 72T One Time Change Of DistributionThe change must be to the Minimum Distribution [MD]method – no other methods allowed.
If you have already taken more than the calculated distribution for 2004 using the MD method, then you have to wait until next year.
Easy thing is to se the account balance as of 12/31, or balance for the month end prior to the change.
The SEPP duration remains unchanged when doing the one-time change.
2004-03-18 10:02, By: Gfw, IP: [172.16.1.72]

L2: 72T One Time Change Of DistributionHello Andy:
I’m sure TheBadger or GFW will respond with more details for your question, but I have a recommendation for you and all advisors using this site. If you haven’t bought Bill’s book, then go to the home page, look to the right for the link and buy the book. Bill has done a fantastic job putting to gether a great reference manual for SEPP / 72(t) issues.
One of the items in his bookthat may help you right now is the expanded, Uniform Distribution Table for RMDs. IRS Pub 590 only starts at age 70, but the appendix in Bill’s book has the table going down to age 10, which was published with the new rulling you are using for your change.
And of course it is a business expense for you.
Good luck
Jim2004-03-18 10:08, By: Jim, IP: [68.1.147.61]

L2: 72T One Time Change Of DistributionSo use the 12/31 balance OR last months balanceand calculate the minimum distribution for this year? Then check to see the difference between what he has already taken and the minimum distribution and go from there?2004-03-18 10:08, By: Andy, IP: [207.98.195.39]

L2: 72T One Time Change Of DistributionYes.2004-03-18 10:36, By: Gfw, IP: [172.16.1.72]