Does Changing Custodians Mid-year Cause Any Problem

You are here:
< Back

L1: Does Changing Custodians Mid-year Cause Any ProblemIs it within the realm of 72t rules to change custodians before receiving the total annual distribution? I’m in the 1st year of my SEPP 72t plan and have recvd 3 of 4 quarterly payments so far.Is it okay If I change from current custodian and investmentand transfer my entire IRA balance to a new custodian and investment and receive the 4th quarterly withdrawal from the new custodian? That would give me two1099-Rs for the year for the same 72t plan. Am I safe as long as the total annual distribution amount is correct?2010-09-08 20:15, By: Mike, IP: [68.35.66.94]
L2: Does Changing Custodians Mid-year Cause Any ProblemYes, no problem as long as the total on those two 1099Rs is the exact correct annual amount. You will have to file a 5329 to report the penalty exception, which you probably would have had to do anyway.
It is advisable to do the transfer directly as it will preserve your one rollover per IRA account for use in a more critical situation. And it will also eliminate having to report a rollover on your 1040 in addition to the 72t distributions.
There have been a couple strange IRS rulings on partial transfers, but no such problem for full transfers.2010-09-08 20:43, By: Alan S., IP: [24.116.165.60]

L3: Does Changing Custodians Mid-year Cause Any ProblemThank you very much.
Maybe because i’m relatively (1yr) new to your site – but i get the feeling this forum, and 72t.net in general, are providing avaluable public service to all of us and filling a need as an authority that can be trusted that is not going unnoticed. I just want to say a sincere heartfelt thank you goes out to all of you at 72t.net for the help you give us.2010-09-08 22:09, By: Mike, IP: [68.35.66.94]

L4: Does Changing Custodians Mid-year Cause Any ProblemThanks for the kind words.Be sure to check back with usif any issues surface.2010-09-08 22:44, By: Alan S., IP: [24.116.165.60]