Busted 72 t distribution for education
L1: Busted 72 t distribution for education
I have a client who took out distribution from annuity in the amount of $12,000 to pay for education. The account was in an uniform gift to minors NJ custodian account. This happened in 2007. Any way out of penalty?
Thank you for your help I have purposed your books in the past they are excellent. Keep up the good work.
2008-03-05 07:41, By: brucep, IP: [18.104.22.168]
L2: Busted 72 t distribution for educationBruce:
Hopefully you inherited this client and didn”t sell him an annuity to fund a UGMA in the first place. This is a TOTALLY INAPPROPRIATE investment vehicle for a UGMA / UTMA.
The really bad news is there is no exception from either the IRS or the annuity”s surrender charges (if anyapply) for educational funding. He”s subject to both the ordinary taxes on any gainand the 10% early withdrawal penalty.
Jim2008-03-05 08:00, By: Jim, IP: [22.214.171.124]
L2: Busted 72 t distribution for educationWhether ornotyou told the SALESMAN the purpose of this INVESTMENT, he should have realized that it was inappropriate, and should have informed you of the penalties and problems. I would contact the branch manager (or company president) to discuss the situation and request that they reimburse you for the penalties, and cancel the contract if there is any balance, without penalties or charges. If they do not repay you, then contact a lawyer to see if you have a valid case.2008-03-05 11:27, By: dlzallestaxes, IP: [126.96.36.199]