initial account balance
L1: initial account balance
It’s now the middle of December and I’m about to start a new SEPP plan with monthly distributions. I would like to take the first distribution this year, if possible (I know that’s pushing it to get through the paper work that quickly). I’m confused about
what value to use for the initial account balance. I’ve read on this site that the balance on 12/31 of the previous year is a good choice, but I’ve also read that any “reasonable” method for determining the value is acceptable. What does the IRS mean by
“reasonable”? Is it reasonable to use the valuation at the end of the 1st quarter of this year (i.e., 3/31/2011)? Is it reasonable to use the valuation at the end of last month (11/30/2011)? Can I pick and choose which of these I prefer? This late in
2011, it almost seems “unreasonable” to use the value on 12/31/2010. That’s almost a year old now. Thanks for your help.
2011-12-15 14:43, By: bob, IP: [184.108.40.206]
L2: initial account balance
Reasonable merely means that the account value that you use is a reasonable valuation of the actual dollars in the account at the start of the SEPP.
It would not be reasonable to use a value from 12/31 is the value on 12/31 was $150,000 and the current value is now $100,000. If last months statement is $110,000 and the current value is $100,000, that would probably be reasonable. If your statement says
$100,000 and you use $100,000 as the initial balance, that would be very reasonable.
2011-12-15 14:58, By: Gfw, IP: [220.127.116.11]