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clarify paymt. modification date / last paymt.

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Last Updated On
ByJJ

L1: clarify paymt. modification date / last paymt.8/27/08
Please confirm/correct my understanding of your “1st modification date”/ last paymt. date for my particular 72(t).My D.O.B. = 5/1/1952Date of first (annual) payment = 4/1/2007Attained age on 1st paymt. date = 55 (age reached during the year of 1st paymt.)5-yr. period ends = 3/31/2012Date age 59.5 = 11/1/20111st paymt. modification date = 4/1/2012
Since I”m taking payments annually, is my last required payment my fifth one taken on 4/1/2011, since the sixth payment would come on 4/1/2012, or my first payment modification date?
Then, my last required payment (4/1/2011) therefore actually is takenBEFOREboth my “5-yr. period end date”(3/31/2012) and my ” date age 59.5 ” (11/1/2011) ? ?Thanks for your clarification !2008-08-27 13:20, By: jj, IP: [4.158.255.83]

L2: clarify paymt. modification date / last paymt.Correct. But many taxpayers are confused in this situation, and think that since they take their 5th annual payment on 4/1/2011, and that this will end their 5 year period. They are wrong. The 5-year period does not end until the END of the 5th year. So, even though you become 59 1/2 DURING that 5th year, you still cannot take another distribution until AFTER the 5th year ends.2008-08-27 13:37, By: dlzallestaxes, IP: [96.245.168.21]

L2: clarify paymt. modification date / last paymt.Another point is that your first payment AMOUNT affects the answer to your question. If by taking payments “annually” you meant that your first payment was a full annual amount in 2007, then your last required distribution is when you have taken out your full annual amount in 2011. At this point, you have taken 5 full annual amounts, as that is a requirement. On the other hand, if you pro rated the 2007 distribution (75%), then you must take out 25% in 2012 in order to complete the full 5 year distribution requirement.
Therefore, the answer to your question is a qualified “Yes” based on the dollar amount of your distributions in 2007.2008-08-27 19:51, By: Alan S., IP: [24.116.165.60]

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