change SEPP distribution frequency/period

L1: change SEPP distribution frequency/periodIs it permissible to change a 72(t) SEPP from a monthly distibution to a quarterly distribution?2003-06-25 16:58, By: John Keith, IP: [127.0.0.1]
L2: change SEPP distribution frequency/periodHello John:
Short answer — yes.
TheBadger
wjstecker@wispertel.net
2003-06-26 17:06, By: TheBadger, IP: [127.0.0.1]

L2: change SEPP distribution frequency/periodThanks Bill for the short answer. So I suppose the detail that is important is to arrange the transition so that in any tax year the annual distrubion amount is not changed from the original plan. Is thisaspect of dealing with a 72(t) documented anywhere in IRC? (Wishful thinking???)2003-06-26 20:03, By: John Keith, IP: [127.0.0.1]

L2: change SEPP distribution frequency/periodHello John:
Unfortunately, much of what is considered correct with respect to SEPP programs is implied or derived from the IRC & now RR 2002-62. In reference to your question, I think two principles apply:
(1) A SEPP program is designed to be constant; at least those that commenced 1/1/03 or later meaning that the same dollar amount is distrbuted each and every tax year to the account owner.
(2) Distributions are to made “not less frequently than annually”.
Using these principles, one can easily come to the conclusion that intra-year distribution frequency is irrelevant as long as the sum of the intra-year distrbutions totals to a correct annual sum equal to the preceeding and succeeding tax years.
Following the logic above, if you were to make 7 monthly distributions followed by 2 quarterly distributions of mathematically prorata amounts, it would violate principle #1 above and IMHO would be considered a modification thus dusallowing the SEPP program. Conversely, if you were to make 5 monthly distributions, then 2 quarterly distributions followed by 1 monthly distribution, I would say all is fine.
TheBadger
wjstecker@wispertel.net

2003-06-26 20:38, By: TheBadger, IP: [127.0.0.1]

L2: change SEPP distribution frequency/periodThanks for the detail Bill. From a logical point of view that strategy makes sense to me (but then who said the IRS has to make sense!) Thank you very much, now I’ll go see if I can make it work.2003-06-26 21:15, By: John Keith, IP: [127.0.0.1]