June 30 SEPP start date

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L1: June 30 SEPP start date1) If I start a SEPP with June 30, 11 balance using one of thefixed mentods.
a) Can I take monthly distribution?
b) If I can take montly distributions, must I recalculate balance and distributions using Dec,13, 2011 account balance?
c) Would it be best from IRS audit purposes to take one annual amount rather than monthly distributions?
2011-06-22 16:12, By: Bigtex at lake, IP: [108.76.86.104]

L2: June 30 SEPP start date1) If I start a SEPP with June 30, 11 balance using one of thefixed mentods.
a) Can I take monthly distribution?
Yes
b) If I can take montly distributions, must I recalculate balance and distributions using Dec,13, 2011 account balance?
“must”… No. May … yes. By using the fixed methods you may keep the total, annual distribution fixed for the entire SEPP Plan time. If you choose to recalculate then you must change all of the factors in your calculations.
c) Would it be best from IRS audit purposes to take one annual amount rather than monthly distributions?
You may take annual, quarterly, semi-annual or monthly distributions, and you may change from year to year. The critical point is that you take the same, totaldollar amount each year, when you use the fixed method.
Jim F2011-06-22 16:20, By: Jim F, IP: [70.167.81.119]

L2: June 30 SEPP start dateAlso remember that the start date is the date of the first distribution. The date you choose for the balance has no impact on the start date.2011-06-22 16:37, By: Gfw, IP: [24.148.10.164]

L2: June 30 SEPP start dateThanks for reply. One more question.
If I start SEPP with June 30, 2011 balance, do I use the interest rate for the payment calculation? Which would hold the amount flat for the 5 year period?

Also, if I set up a SEPP with Tax Accountant or CPA, would they be liable for penalty and interest if the SEPP was ruled incorrect by IRA? In otherwords, I can set up SEPP, unless letting a CPA or Tax Accountant will hold them liable for the calculation.
2011-06-22 16:39, By: Bigtex at lake, IP: [108.76.86.104]

L3: June 30 SEPP start dateYou can use the interest rate for either of the 2 months preceding the date the first distribution occurs. If you are going to use June 30 to determine your balance, it would be very difficult to get the 1st distribution in June so it sounds like the max rate would be the higher of the May or June rate.
You IRA is between you and the IRS and any penalties imposed by the IRS would be to you. If you could prove negligence on the part of you advisor, then you may have legal recourse against theadvisor. With that said, most plans that fail, fail over time even if properly set up.
If you haven’t already, please read our Planning Pointers. You may want to do some reading and studying before you actually start your plan.
2011-06-22 16:58, By: Gfw, IP: [24.148.10.164]

L4: June 30 SEPP start dateWhat does this statement mean? I have an IRA with AMerican Century and one with Vanguard. Can I do a SEPP from one of these IRA? Or must I combine them for SEPP calculation?

SEPP Custodial Account. Consider using a brokerage Custodial Account for your SEPP plan that allows you to choose investments from any source that you desire. Reallocating your investments within your custodial account is different from doing a Partial Transfer to a new Custodian. Partial transfers were rejected by the IRS in PLR 200925044 & PLR 200720023.2011-06-22 17:13, By: bigtex at lake, IP: [108.76.86.104]

L5: June 30 SEPP start dateIt would make sense for you to READ the pointers on this website, and possibly the book, before asking a list of questions as thye come to you.
There is no limit to the NUMBER of IRA accounts that you have, or the number of brokers or mutual funds. YOU determine which accounts YOU consider to be included in YOUR SEPP 72-T UNIVERSE. We recommend using the REVERSE CALCULATOR on this website to determine how much of a UNIVERSE that you will need in order to provide you with the INCOME/CASH FLOW that you need. Also, you must determine how much you need in 2011, and then future years, in order to determine what UNIVERSE you will need. Also, you have an option in the first year to either take the full ANNUAL DISTRIBUTION DURING 2011, OR A PRORATED PORTION BASED UPON THE NUMBER MONTHS in 2011 fro your plan starting with the first distribution date.
You can take distributions rom ONE or ALL of the IRA accounts that you designate initially as being included in you SEPP 72-T UNIVERSE.2011-06-22 18:31, By: dlzallestaxes, IP: [96.227.217.194]

L5: June 30 SEPP start datebigtex at lake…
Please don’t take offence, but based on your questions and your previous posts, I really don’t think you are ready to start a SEPP.
>>Or must I combine them for SEPP calculation?You can use one or more IRA accounts in a SEPP. If you include in the calculations, they are then part of the SEPP.
>>What does this statement mean?It is a suggestion to avoid the problems associated with partial transfers. 2011-06-22 18:32, By: Gfw, IP: [24.148.10.164]

L5: June 30 SEPP start dateIs this a correct statement? You have an IRA held direct with American Century and it holdsAmerican Century mutual funds. You have a second IRA held direct with Vanguard and it holds Vanguard mutual funds. Am I right or wrong?
Assuming you have done your budgeting homework and determined how much money you will need to withdraw annually from your SEPP Plan, and then assuming that you have used the “Reverse Calculator” on this site to determine how much money you need in your SEPP Plan universe of accounts tofund your annual withdrawals, then you adjust your IRA accounts so that your SEPP Plan Universe has the right amount and you transfer out any excess to another IRA account for emergencies, then you are ready to begin your first withdrawal. If this sounds as complicated to understand as it was to write, then GFW’s comment will make sense.
Open a brokerage IRA account and transfer from your two IRA’s into this new IRA the necessary dollar amount of assets … either “in-kind” mutual funds or cash … to fund your SEPP Plan annual withdrawals. The brokerage account doesn’t care whose mutual funds it holds (as well as individual stocks, bonds, CD’s, REIT’s, etc.) as it is one IRA account with one account number and that’s the key to having a successful SEPP Plan. You can buy and sell as you wish and it isn’t a problem. But if you keep them separate at AC and VG, you run the risk of sometime during your plan period having to move funds around such that you cause a partial transfer and thus bust the plan.
Hope this helps.
Jim F2011-06-22 18:41, By: Jim F, IP: [70.167.81.119]