Do you have to notify custodian
L1: Do you have to notify custodian Do you have to let the custodian (brokerage house) know that the withdrawal is under the 72t rule and you will not be paying the 10% penalty or do you only have to deal with that at tax time?2013-02-27 19:50, By: Dumbfarmer, IP: [188.8.131.52]
L2: Do you have to notify custodian Have you looked at the “Withdrawal Form” from your boker or talked with your broker about setting up a 72(t) program?
More than likely the form will have a box to check indicating you are setting up a 72(t) as the reason for the distribution. By doing this you might get lucky … not likely these days … and the custodian will issue a “Code 2” on the Form 1099-R which indicates an exception to the penalty for an early distribution. However you will probably get a “Code 1” on Form 1099-R and then you will have to file Form 5329 with your tax return to claim the exception and not pay the 10% penalty. This latter event is normal these days.
Hope this helps.
Jim F2013-02-27 20:20, By: Jim F, IP: [184.108.40.206]