IRA Distributions After 72(t) Has Ended

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L1: IRA Distributions After 72(t) Has EndedI started a 72(t) from an IRA account in 2005. In early December, 2009, I will reach the 5 year mark of my distributions. Earlier this year, I reached 59 1/2 years of age. My question is this: Can I take an additional one time distrubution at the end of December without busting my 72(t)? I would like to take the distrubution for tax purposes. Thanks for any guidance you can give me.2009-11-17 22:31, By: Jim, IP: [69.138.53.41]
L2: IRA Distributions After 72(t) Has EndedInsufficient information. Start by entering your information in the First Modification Date calculator at http://72t.net/FirstModificatonDateIt will give you a date when the SEPP plan can officially end.2009-11-17 22:46, By: Gfw, IP: [216.80.125.206]

L3: IRA Distributions After 72(t) Has EndedThe calculator tells me I need to wait until next year to take an additional distribution. However, can I recharacterize a part of my trad. IRA to a Roth while still taking 72(t) distributions without violating the 72(t) rules?2009-11-18 00:05, By: Jim, IP: [69.138.53.41]

L4: IRA Distributions After 72(t) Has EndedYes, you can do a Roth conversion while your 72t plan is still active. But you cannot convert your 72t distribution itself.Therefore, you will be taking additional distributions, noteliminating the 72t amount by rolling it to a Roth IRA. Be sure no withholding is made for the conversion unless you want the withholding to count as part of your 72t amount.There is plenty of opportunity for confusion in doing this so be sure you double check everything. You can still recharacterize the conversion if you decide it was a bad idea for whatever reason and your 72t plan would not be affected.A 2010 conversion has the added advantage of tax deferral allowing some people to pay the conversion taxes after their 72t plan modification date has been reached.2009-11-18 01:10, By: Alan S., IP: [24.116.165.60]

L5: IRA Distributions After 72(t) Has EndedThanks, Alan S. This was very helpful. I will be re-charactizing a small part of my trad. IRA to “use-up” some room in a low percentage tax bracket in 2009.2009-11-18 02:04, By: Jim, IP: [69.138.53.41]

L6: IRA Distributions After 72(t) Has EndedAm I right inguessing that you will ge paying the income tax on the conversion amount from personal non-SEPP Funds?2009-11-18 10:47, By: Gfw, IP: [216.80.125.206]

L7: IRA Distributions After 72(t) Has EndedThat’s right. I will be paying the taxes from non-SEPP funds. Therefore, no withholding is involved. Also, the amount of my conversion will only be a small portion of my total TIRA. It just seems to make sense to convert what I can now while I’m in a lower tax bracket.2009-11-18 14:25, By: Jim, IP: [69.138.53.41]

Note: Roth recharacterizations are no longer allowed after 2018