Double Check Final Distribution

L1: Double Check Final DistributionI am ending my last year of the 72t. Here is the situation:

Date of check 1st
distribution: 2-1-2002
Attained Age on 1st Payment
Date: 56
5-Year Period Ends: 1/31/2007 per calculator
Date Age 59.5: 6/19/2006 per calculator
First Payment Modification
Date 2/1/2007 per calculator
Equal Pmts were received:
2002 2003 2004 2005 – 2006
Must I take a 2007
distribution at all?

And if I do make a new, “normal distribution” am I
correct that it can take place any time from 2-1-2007 or later and be
for any amount I chose?

Hope you will excuse me for double checking as I want to get it right.

Thanks.

2006-10-18 15:59, By: Arlo, IP: [69.63.21.84]

L2: Double Check Final DistributionArlo,
Check a posting by “squeaky” back on or around 1/17/06. It was a very similar question. One other note, I would definitely add a few days to the first modification date you listed, just to be sure. KEN2006-10-19 21:15, By: Ken, IP: [68.160.11.125]

L2: Double Check Final DistributionOOPS– That posting date by SQUEAKY was 1/24/2006. Change the # of months viewed to 10, and it is on a page inthe mid 20”s KEN2006-10-19 21:20, By: Ken, IP: [68.160.11.125]

L2: Double Check Final DistributionArlo,
Your second question can be answered more directly than the first. After your modification date plus a few days for padding as Ken suggests, you can do anything you want since your 72t plan has ended. Subsequent distributions would just be considered as “normal” distributions.
The first question reflects a situation that does not have much in the way of exact precedents. However, the IRS has not been too picky about stub years unless the taxpayer really abuses the concept of “substantially equal.” Accordingly, this is more of a common sense conclusion. Since you have taken 5 full years of distributions AND reached 59.5, there should be no need for you to take a distribution in January, 07 or for that matter at any time in 07. Now, if you have been taking monthly distributions all along, then I would not break the pattern and would recommend taking the Jan, 07 monthly. You apparently do not need a January distribution, and barring the montly scenario, should be more secure by not taking one. If you took the full annual in January, you would probably be OK, but best not to deal with “probables” when you don”t need to.2006-10-19 23:05, By: Alan S., IP: [24.116.66.98]

L2: Double Check Final DistributionHello Arlo:
Arnold v. Commissioner (111 TC 250) set the standard for measurement on this issue. In short, there are three rules:
1. Make a distribution every year.
2. Make at least 5 annual distributions.
3. Make no other additional distributions during the 5 year period; in your case as measured from 2/1/02 and 2/1/07.
So, what to do during the period 1/1/07 to 2/1/07? In your case you have three choices:
1. Make no distribution
2. Make a prorata 1 month distribution
3. Make a full annual distribution.
TheBadger
wjstecker@wispertel.net

2006-10-20 07:35, By: TheBadger, IP: [72.42.67.45]

L2: Double Check Final DistributionAs a followup to the Badger”s last comment, if Arlo took a full distributionin Jan ”07, I wonder how the custodian would report it? He would have already taken a full 5 yearsdistributions in the preceding years, AND he is now 59 1/2 as of the Jan. ”07 distribution. Wouldthey just report it as a “normal” (post 59 1/2) distribution rather than a Box 2 exception on the 1099?
I”m interested as I am just starting a 72t plan and I will have the same issue at the end of my 5 years. I”ll be taking a full distribution in ”06-”10, but my 5 years won”t be up until 10/31/11.
2006-10-23 23:32, By: vaboy, IP: [69.170.54.170]

L2: Double Check Final DistributionI will be 59 1/2 at the end of March ”2007. I started my SEPP on Jan ””2000 (attained age 53) with equal monthly payments from two IRA”s. I have two questions:
1. Must I simply continue the same monthly distributions thru the end of March and then end the plan ( then take random distributions as needed), or do I have to take the full annual amount in 2007?
2. Couldn”t I just change the method to minimum distribution effective Jan”07 (one time allowable change) and divide the annual amount by 12 and take 3 payments (Jan,Feb, and Mar) and end the plan?

I just dont want to foul this up at the end…thx

2006-11-28 14:42, By: Bill, IP: [162.84.127.32]

L2: Double Check Final DistributionARLO: Leave it to the CPA on this site to “audit” your information. You stated that your “attained age at 1st payment date 2/1/2002 was 56”. Then you stated that your “date age 59.5 was 6/19/2006″, which was 4 YEARS AND 4 1/2 MONTHS LATER !!!!I assume you were born 12/19/1946. Therefore, on 2/1/2002 you should have been 55, not 56. Otherwise, you have discovered a new way to reduce the aging process, or you won”t be 59 1/2 until 6/19/2007.
BADGER: Are the SEPP 72-T IRA accounts actually “titled” as such, or merely designated in the taxpayer”s documentation as to which ones are to be considered for calculation purposes ? If “titled” as SEPP, then wouldn”t we have to “untitle” them to eliminate confusion for the institution and the IRS ?
2006-11-28 16:45, By: dlztaxes, IP: [4.175.9.107]