Gains on an account

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L1: Gains on an accountI am considering starting a 72t distribution. For my question, lets assume I have 250,000 dollars to start with, and Istart payments under the standard rules.
If the IRA account starts exceeding the 250,000, because the amount gained each yearis larger than the annual payment amount, what choices would I have?
For the example, lets assume my IRA had gained to 270,000 dollars (20,000 above the original amount)
1) Could I move the 20,000 to another IRA, and treat it separately?
2) Could I take a separate distribution on the 20,000 (pay penalty and taxes of coarse).
3) Also, can I ever change the starting amount (to a lower amount), as long as I keep up the annual payments?
I hope this is clear.

2009-03-27 17:41, By: Dave, IP: []

L2: Gains on an account1 & 2) No
3) You can make a one time switch to the RMD method. Under that method, you would use a new 12/31 balance every year. This method produces a lower payout by around 40% vrs the fixed distribution methods, and in addition your annual distribution would bounce around in relation to the prior year ending balance.You can also elect this method to start with, but with a lower distribution per dollar of account balance, this is not a good idea.
The commonly usedmethods of amortization and annuitization produce a fixed dollar amount that does not change from year to year and is much higher than the RMD method. Any gains in your account will be there for you when your 72t plan ends. But you cannot remove them without busting the plan.
2009-03-27 17:50, By: Alan S., IP: []

L2: Gains on an accountYou should only put into a SEPP 72-T the minimum that you need to accomplish the annual distribution you need. Keep any additional IRA accounts/amounts in a separate account for future emergencies. This will accomplish the flexibilityyou are discussing.2009-03-27 20:10, By: dlzallestaxes, IP: []