L1: Account balanceI set up an IRA in Dec-2012 with funds from my main IRA with the intention
of starting a 72t in 2013.
Since the plan has not yet started, would it be OK for me to transfer additional funds into the 72t IRA account at any time in 2013 and to use the new higher account balance in my plan calculations or do I need to use some average of the account balance over a period of time?
For example, if my Dec-31-2012 balance was 250K, and I add 50K in April, can
I use 300K as my plan balance?
Thanks2013-03-24 00:37, By: mh, IP: [220.127.116.11]
L2: Account balanceYou may be under a wrong understanding of SEPP 72-T procedures.
1. You do not have to start with a 12/31 balance.
2. The balance must be “reasonable”, and we usually believe that any balance up to 6 months before the first distribution is appropriate.
3. You can add to the account you “expect” to use, or can add a 2nd account as part of your “SEPP 72-T UNIVERSE” at any time BEFORE your first distribution from the SEPP IRA account(s).
4. Once you take a distribution from your SEPP72-T account(s), you can never make any additions to your SEPP IRA accounts.2013-03-24 03:04, By: dlzallestaxes, IP: [18.104.22.168]
L3: Account balanceTo further clarify point #3 & #4 from DLZ, once you establish the total balance used in your SEPP calculations, you cannot add or subtract from that IRA (or those IRA’s if you use the sum of more than one) even if you don’t get your first payments for a while. Also- Make sure you have a hard copy printout of the balance(s) that make up the total used in your calcs, and that it includes the date of that/those balances on the report, so you have proof of the balance date and amount used in the SEPP calcs, if ever needed. Check out the72TSample Formthat is on this site, that should also be used to document your plan. The link to itcan be found on the home page in the “SEPP links” section in bottom left area.
Ken2013-03-24 16:27, By: Ken, IP: [22.214.171.124]