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Custodian Error

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ByConcerned

L1: Custodian ErrorI have four separate IRA accounts with a major brokerage firm. I have received quarterly SEPP withdrawals from each IRA account for about 2 years. For the April, 2005 withdrawal, one of my accounts had insuffieient cash to cover the withdrawal. Rather than sell some of the stocks in that account, my broker transferred funds form another IRA account that had excess cash, to the one short on cash.I am concerned this will trigger tax penalties. Is this correct? How can I get this corrected without making the situation worse? Where can I read more on this subject?2005-07-06 13:51, By: Concerned, IP: [65.35.156.136]
L2: Custodian ErrorShort answer… if the IRA that had cash was also part of the SEPP, there should be no problem. If the IRA that had cash was not part of the SEPP, you may have ”busted” the SEPP.2005-07-06 14:10, By: Gfw, IP: [172.16.1.78]

L2: Custodian ErrorThanks for the quick answer? My financial advisor at the brokerage has stated that each IRA has it own separate SEPP, and must be maintained separately. He says moving funds from one to the other is a withdrawal, and would bust the SEPP for the IRA the funds were transferred from, by making the withdrawals not substantially equal.I’m not sure what the emplicationswould befor the IRA receiving funds. Is he correct? Or, is the SEPP the combinition of all the IRA’s withdrawals, as you seem to be suggesting. FYI, on my past tax returns, I have submitted only one 5329-T form for the combined amount of all the IRA’s withdrawals. 2005-07-06 16:59, By: Concerned, IP: [65.35.156.136]

L2: Custodian ErrorHello Concerned:
Your broker / financial advisor maybe speaking out-of-hand or he maybe accurate. It all depends on how YOU created and defined the SEPP plan. Remember, you create the plan, not your broker & with 4 IRAs there are a multitude of plan combination possibilities. Now I certain you carefully documented all of this 2+ years ago, so you need only return to those documents to determine the real fact & circumstances.
In the absence of originating documentation, I woudl suggest you seek some professional help from a licensed professional; either a CPA or tax attorney; not your broker.
TheBadger
wjstecker@wispertel.net
2005-07-06 19:34, By: TheBadger, IP: [66.250.23.21]

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