Beginning Balance

L1: Beginning BalanceI am planning to begin taking SEPP withdrawals on 1/1/03, based on my 12/31/02 balance. Does this balance have to be the exact account balance on that date or can it be a close approximation? Do I have to wait until I know that exact balance before I can draw up the 72T payment schedule? I called my broker regarding how to begin the payments and it seems to be as easy as a phone call the day before I want to start, but how can I plan ahead when I don’t know what that balance will be until the close of 12/31?2002-03-26 17:32, By: teknchuck, IP: [127.0.0.1]
L2: RE: Beginning BalanceBeginning balances should be exact; at least to the dollar. Although there are no direct regulations on this issue; there are two things worth mentioning:1. There was a taxpayer whose accoutant mis-calculated the opening balance by several thousand dollars and attempted to get a private letter ruling to correct the situation. The IRS ruled negatively and penalized the taxpayer.2. The IRS’s long standing rule on accuracy is within the definition of the word “de minimus”. Their interpretation is $1; rouded or truncated.In summary, this is not an area to fool around in & it is much better to be safe than sorry; therefore I always recommend using a month-end/year-end account balance exactly.TheBadger2002-03-27 07:57, By: TheBadger, IP: [127.0.0.1]

L2: RE: Beginning BalanceI totally agree with the previous post. If the payment can be as easy as a phone call can the exact balance be much more difficult to get? BTW – I would keep the statement used to determine the original account balance as part of your SEPP plan’s permanent records.Documentation for every part of the plan should be in writing!2002-03-27 08:03, By: Gfw, IP: [127.0.0.1]