Criteria used to allocate % of IRA value to a SEPP

L1: Criteria used to allocate % of IRA value to a SEPPI have a very basic question for seasoned professionals. Here goes: Present IRA value of 700,000. We want to allocate 411,000 of the 700,000 to the SEPP plan. How is that done?

Let’s say you have the 700,000 spread among 7 IRAs. One IRA is valued at 411,000 and the other 6 IRAs have an agregate value of 289,000.

What is done or what is the procedure that designates the 411,000 IRA as the one allocated to the SEPP plan? Excuse my ignorance but I have never done this before.

Thank You in Advance

Keith James2005-06-14 21:51, By: Keith James, IP: [66.127.235.249]

L2: Criteria used to allocate % of IRA value to a SEPPHello Keith:
The normal way would be to prepare a Letter of Self-Determination; kinda a like a contract with yourself which designates the $411k IRA in writing as the SEPP IRA and then simply commence withdrawals from that IRA. Initially, this document goes no where other than in your files; however, later on, two or more parties may be come interested & want to see that document: the IRS in the event of an audit; a banker who might consider lending you some money.
TheBadger
wjstecker@wispertel.net
2005-06-15 07:31, By: TheBadger, IP: [66.250.23.21]

L2: Criteria used to allocate % of IRA value to a SEPPTheBadger’s suggestion is a great idea since it shows “proactive action” on your part to positively establish the definition of your SEPP plan.
Additional documentation of your intentions is what I will call the “default action plan.” Never heard that terminology … just made it up while typing. Anyway, when you set up the distributions from your SEPP IRA with the custodian, you will complete forms which will designate that you areusing IRA Section72(t) as the exception to the early distribution penalty rules. Your other IRA’s won’t have any such action documentation hence, “by default,” you have documented which IRA isyour SEPP plan.
Jim2005-06-15 10:52, By: Jim, IP: [70.184.1.35]