Final Distribution Confusion – followup!

L1: Final Distribution Confusion – followup!
Sorry this is a repost but the forum did not update my earlier reply (more than a week ago) and I wanted to get a response if possible.
Hi dlzallestaxes.
I read your reply to Bob_85364. I just want to make sure that I correctly understand your earlier comments regarding my Plan. Possibly the details of the requirement for the Final Distribution may be of interest to others. Once again my Plan details:
1st Distribution Date: 12/27/2012
Date Age 59.5: 11/27/2017
5 Year Date: 12/27/2017
1st Modification Date: 12/28/2017
My 5th and most recent distribution was on 12/22/2016.
I understand that the Plan terminates on 12/28/2017. That said, am I still required to take a 6th distribution in 2017 to satisfy the Plan? Does having reached the 1st Modification Date allow me to NOT take a distribution for 2017?
I just want to be clear on this point. There is considerable difference of opinion in other forums and blogs regarding the timing of the last distribution.
Thanks again for your help! And Happy New Year!
As a recap, you previously said in response to my question if I needed to take a 6th distribution in 2017:
No. You are done.
1. You have taken distributions IN 5 calendar years — 2012, 2013, 2014, 2015, and 2016.
2. Your plan has been in existence for 5 years = 60 months.
3. You became 59 1/2 AFTER you plan existed for 60 months.
4. You have covered all of the bases. HOME RUN !!!!
Regarding #3, upon further clarification you said:
“My poor wording. I should have said that you were already 59 1/2 when the 60 months for the plan when it terminated.”
Later you posted to Bob_85364:
BE CAREFUL !!! Not so fast.
First, the plan must be in existence for at least 60 months. Since you took your first annual distribution at some time in 2013, the 60 months will not be up until 1 day after the 5 year anniversary of the first distribution, which by definition will be sometime in 2018 !!! It does NOT end after the 5th annual distribution, which could be as early as the day after the 4-year anniversary of the initial distribution.
Second, even if the plan has been in existence for 60 months, you also must be 59 1/2 as well, because the plan does not terminate until the LATER of these two events.
2018-01-07 07:35, By: George_P, IP: [50.0.121.168]

L2: Final Distribution Confusion – followup!
Yes, dlz was completely correct.
You have a 5 year plan and you hopefully took 5 full annual distributions, so when your plan ended in 2017 there was no need for a 2017 distribution. In fact, it is better that you did not take one. All this assumes that you DID take a full annual distribution in Dec, 2012. Any plan has a minimum requirement of at least 60 months of distributions, so if your 2012 distribution was not a full annual, then you have fallen short of that requirement and busted the plan.
2018-01-07 16:13, By: Alan S, IP: [24.117.172.15]

L3: Final Distribution Confusion – followup!
Yes, my 12/27/2012 distribution was in the full amount. I made 5 full annual distributions in Dec of 2012, 2013, 2014, 2015 and 2016.
As expressed earlier, my concern is that I did not reach age 59-1/2 until Nov 2017. Does the Plan require that I take a distribution after that date (Nov 2017) or in that calendar year (2017)?
Thank you for the reply.
2018-01-07 19:39, By: George_P, IP: [50.0.121.168]

L4: Final Distribution Confusion – followup!
So if I took out my 1st distribution 01/05/2015, turn 59.5 12/15/2019, my plan terminates 01/05/2020, and I’m free to withdraw as desired on 1/06/2020.
If I get eager or sloppy and withdraw a non SEPP on 01/04/2020, I have broken the plan? But if I have taken 6th payment, then I have to wait until 01/05/2021?
If I have another IRA that I haven’t been doing 72t, I could freely withdraw from it on 12/15/2019.
Correct?!
TIA, Tom
2018-01-12 21:05, By: Tom, IP: [50.199.53.209]

L5: Final Distribution Confusion – followup!
If you have another IRA that is not part of your SEPP and you didn’t use the balance of it to calculate your SEPP distributions, you can take any distribution you want from that IRA anytime. However, there will be a penalty until you reach 59.5.
For your SEPP IRA account, by the end of 2019 you should have taken out 60 months of distributions and should not take a distribution in the first 5 days of 2020. Doing so creates a risk of busting the plan since this is a 5 year plan. Starting 1/6/2020 you can take out as little or as much as you wish, so there is no reason to act in the first 5 days.
If you did take a full annual distribution in the first 5 days or 1/12 of the annual amount, you can still take out more after the 5th if you wish since your plan ends on 1/5 unless you busted it sooner.
2018-01-13 00:08, By: Alan S, IP: [24.117.172.15]

L6: Final Distribution Confusion – followup!
Hi Alan_S,
You did not reply to my post on 1-7-2018 and I was really hoping to get your advice. Thank you (and dlz) for your contributions to the forum!
Yes, my 12/27/2012 distribution was in the full amount. I made 5 full annual distributions in Dec of 2012, 2013, 2014, 2015 and 2016.
As expressed earlier, my concern is that I did not reach age 59-1/2 until Nov 2017. Does the Plan require that I take a distribution after that date (Nov 2017) or in that calendar year (2017)?
2018-01-14 01:05, By: George_P, IP: [50.0.121.168]

L7: Final Distribution Confusion – followup!
No. The only date that counts is your plan modification date which in this case is the day after 5 years from your first distribution. The modification date is automatically the later of age 59.5 or 5 years and in your case the later is 5 years, so when you reach 59.5 did not matter. Since the modification date was in 2017 and you already distributed 60 months worth, you should not have taken a distribution in 2017.
If you did take a 6th annual distribution in 2017, it does not mean that the IRS will bust your plan, but it is better if you didn’t.
2018-01-14 04:27, By: Alan S, IP: [24.117.172.15]

L8: Final Distribution Confusion – followup!
Hi Alan_S. Thank you very much for your feedback. I did not take a 6th distribution in Dec 2017 based on earlier advice from dlz. I was still uncertain regarding that decision. I successfully defended my Plan in response to an IRS Notice several years ago and didn’t want to risk ‘busting’ my Plan at this last step. Thanks again!
2018-01-14 05:35, By: George_P, IP: [50.0.121.168]