Documentation

L1: DocumentationOn the SEPP sample form there is a statement as follows: “To comply with RR 2002-62, the initial valuation date should probably be the December 31 of the prior year, or on a date within a reasonable period before that year’s distribution.” I can understand how this would apply to an SEPP that included “all” of ones IRAs however I don’t understand the relevance where a separate account is being prepared for a SEPP. For a SEPP in a separate account and not including all of ones IRAs what seems to make more sense is the valuation of the account immediately before the first withdrawal is made. What am I missing.2010-04-17 20:51, By: ralph, IP: [98.200.50.114]
L2: DocumentationCheck out 2002-62, Section 2.02(d) – it is merely a suggestion based on IRS wording. The real test is whether the balance is a “reasonable” representation of the value of the account.2010-04-17 21:06, By: Gfw, IP: [24.148.10.164]

L2: Documentation”I can understand how this would apply to an SEPP that included “all” of ones IRAs however I don’t understand the relevance where a separate account is being prepared for a SEPP.”The reference to “all IRAs” refers to all IRA accounts used to form your “SEPP Universe.” If you have multiple IRAs but only one is designated for your SEPP Plan, then your SEPP Universe consists of that one IRA account. If you had 5 IRA accounts and you wanted to use the total value of 3 IRA accounts, then those 3 IRA accounts would comprise your SEPP Universe.Hope this clears up your confusion.Jim2010-04-20 21:37, By: Jim, IP: [70.167.81.119]

L3: DocumentationIf you are creating an IRA account with an optimum balance for your distribution requirements, then you cannot go back further than the date the account was funded. If the account you are using has not received a contribution or distribution prior to the SEPP start date, you are safe going back perhaps 6 months. But since the IRA balance must be a reasonable representation of the balance when the plan begins, you ALSO cannot use a balance that is not reasonable with respect to the current balance. The IRS has not defined a % variance that would be deemed reasonable, but I feel if you go over 20%, you are asking for trouble. In the 2008 market meltdown, an 8/31/08 account balance would probably not be OK for a November start date due to the market meltdown.Due to the above, it would be judicious not to have high volatility investments in the IRA intended for a plan, or your balance could be very unstable and interrupt your planning.2010-04-20 22:29, By: Alan S., IP: [24.116.165.60]