Changing from rmd to annuitization
L1: Changing from rmd to annuitization Situation is an annuity, 2 years have gone by with annual payments under 72(t). The amount was improper in the first year and was corrected. Now, at the third year, can the client change to annuitzationon annuitization table of the insurance company?She is now 50 and was 48 when the first72(t) distribution was made. Thank you for your input. Great website!2012-11-28 19:00, By: Jim, IP: [18.104.22.168]
L2: Changing from rmd to annuitization Short answer No.
That would be a change in the distribution pattern and the SEPP would be broken. Someone can change to the Minimum Distribution [MD] method from the other 2 methods, but not from the MD method to one of the other 2. 2012-11-28 19:05, By: Gfw, IP: [22.214.171.124]
L2: Changing from rmd to annuitization What do you mean by “The amount was improper in the first year and was corrected” ?
Why does she/you want to change the annual distribution ?
Was the payment from the annuity to the SEPP 72-T wrong, or the distribution from the SEPP ? Please give us the figures so we can see if the SEPP is really valid at all.2012-11-28 19:20, By: dlzallestaxes, IP: [126.96.36.199]
L2: Changing from rmd to annuitization I interpret this as a 72q plan directly from a NQ annuity, but the rules are the same as for an IRA 72t plan with respect to the SEPP. Taxes however are different.
If the 2011 and 2012 distributions need to be changed now, the plan will be busted whether it was temporarily corrected earlier or not. The usual course of action would be to report a busted plan on the 2012 tax return on Form 5329. Then start a new 72q plan effective 1/1/2013 using the 12/31/2012 balance. Use the calculators on this site, not those of the insurance company which are probably not based on the IRS approved procedures for SEPP payments.
2012-11-28 21:25, By: Alan S, IP: [188.8.131.52]