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Broken 72T

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Last Updated On
ByKR

L1: Broken 72TBroken 72 T
Case: Year 1: correct 72T dist taken
Year 2: amounts in excess of 72T distribution taken
Year 3: correct 72T dist taken: IRA owner turned 59 1/2 in October of 3rd year
Questions: Once the 72T is broken does IRA owner contine to take distributions for 5 years?
Is the 10% penalty paid only on year 1 & 2 or is it also paid on amounts received before reaching 59 1/ 2 in year 3?
Thank you for your help.

2011-01-28 15:46, By: KR, IP: [67.76.237.197]

L2: Broken 72TThe 10% penalty is due on any distributions taken prior to age 59.5 – the IRS will calculate the past due interest.2011-01-28 16:09, By: Gfw, IP: [24.148.10.164]

L3: Broken 72TThanks. Is IRA holder required to continue taking the 72T distributions until the five year period is up? Or are distributions no longer required once the 72T is broken?2011-01-28 16:37, By: KR, IP: [67.76.237.197]

L4: Broken 72TOnce broken, the SEPP is done so no 5-year requirement.2011-01-28 16:39, By: Gfw, IP: [24.148.10.164]

L5: Broken 72TTo add on to Gordon’s reply, (his two replies when combined do point this out) although you broke it in year two, you will also owe the penalty on all year 3 distributions prior to age 59 1/2. KEN2011-01-28 18:36, By: Ken, IP: [71.192.121.212]

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