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Additional Early Withdrawl

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Bypetey

L1: Additional Early WithdrawlIhave an IRA account from which my 72t distribution has been taken out for the last 4 years. I just turned 58. My wife an I have a credit card debt due to her recent surgery which we want to pay off. Can Itake out an additional withdrawl from this account?Appreciate your comments.
pcarch2005-08-30 07:29, By: PETEY, IP: [161.226.4.6]

L2: Additional Early WithdrawlHi Petey:
Short answer: NO
I don’t have the statistics available to me but I think this question is asked more than any other because the IRS guidance and the Statutes seem too confusing and contradicting. One section of IRS Pub 590 seems to indicate you can take an additional, qualifying distribution, while other sections indicate that you can not take the additional distribution. The only way to get a definitive answer to your question is:
1. File a PLR for your situation. Problem with this method is the cost-benefit result of filing the PLR is negative. In other words it will cost more to file the PLR and take too much time for the IRS to respond than the limited benefit of the distribution you will receive.
2. Get Congress to legislate and clear up this issue.
3. The IRS revises Pub 590 to clear up this issue. Since the 2005 edition hasn’t been issued yet, there’s hope.
Best recommendation at this time is to find another source of funds to pay off the credit card or keep paying interest until you satisfy the 5-year and age 59 1/2 rule on your 72(t).
Wish I had better news.
Jim2005-08-30 08:50, By: Jim, IP: [70.184.1.35]

L2: Additional Early WithdrawlJIM,

Thank you for the prompt & detailed reply! Appreciate your time.

PETEY2005-08-30 12:56, By: Petey, IP: [161.226.4.9]

L2: Additional Early WithdrawlYou asked about taking the additional withdrawal from THIS ACCOUNT.
If you have another IRA, there is an exception (#5)from the 10% penalty for “premature withdrawals” from an IRA for medical expenses “IN EXCESS OF THE 7.5% OF AGI THRESHOLD”.
There is another exception (#7) that allows distributions from a non-SEPP 72-T IRA account for health insurance premiums for certain unemployed individuals.2005-08-30 13:03, By: dlztaxes, IP: [4.175.9.127]

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