72(t) Reasonable Intrest Rate
L1: 72(t) Reasonable Intrest RateMy question is regarding the pre-age 59 and 1/2 72(t) deductions. I”m trying to determine what the highest reasonable interest rate I could use? You show on your illustrations 120% of the Mid-term rate which is low. I have spoken with an account that feels you could go as high as 2% points above prime. I”m wondering what is actually the highest rate I could use with out having a 10% penalty2008-02-07 15:52, By: jason, IP: [220.127.116.11]
L2: 72(t) Reasonable Intrest RateHello Jason:
The maximum (whether it is reasonable or not is now irrelevant) interest you can use is 120% of the mid-term applicable federal rate for either of the two months that preceed the month of the 1st distribution. See Revenue Ruling 2002-62.
P.S. Suggest you consider a new accountant.
2008-02-07 16:02, By: TheBadger, IP: [18.104.22.168]
L2: 72(t) Reasonable Intrest RateJaosn,
The actual 120% Fed Mid Term rates that The Badger explains are posted on a section of this web site. Make sure you look at the actual ones, and not the estimates. You cannot go any higher than the one that applies for the month in which you take you first withdrawal, which is either one of the two months (in the calendar) that preceed the month of your first payment. Your accountant does not know anything about 72 SEPP plans.. Take the Badger”s advice and RUN from him!
KEN2008-02-07 20:24, By: Ken, IP: [22.214.171.124]