Message for TheBadger – Interest Rates

L1: Message for TheBadger – Interest RatesI see that 120% of the Mid Term Interest rate is now at 4.26. A rate of 5% suits my needs better. What is your experience using a rate a little higher than 120% of the Mid Term? I””m not asking for a definite recommendation, just your opinion of the IRS reaction to this. I do not wish to go to the trouble of a PLR.
Also my wife and I are going to set up several 72t plans early next year. Our accounts are currently with Schwab who will follow our instructions as to the distribution method but will not be managing the plan or the required calculations. They said they will be furnishing a 1099-R with code 2 at our request. We have to sell securities and request funds so the plan integrity is on us.
Does your publication “A Practical Guide to 72(t)” contain the information we need to go it alone? I noticed that the description for Chapter 7 seems to deal with this.

2003-12-15 13:37, By: JimD, IP: [127.0.0.1]

L2: Message for TheBadger – Interest RatesAs it stands, the 120% mid-term rate for either of the previous 2 months is the maximum allowed – the IRS has issued no PLRs granting rates in excess of the stated maximum.
I also don””t believe that they would approve a rate higher than the rate stated in Rev. Rul. 2002-62.
One last point… I have a hard time believing that any IRA Custodian/Trustee woukld give you a code of ””2”” unless they agreed to the assumptions at the time of implementation and that they held all the funds. As an IRA Custodian, I review all SEPP assumptuions before the initial 1099 receives a code of ””2”” and any change after implementation requires an additional review.2003-12-15 14:07, By: Gfw, IP: [127.0.0.1]

L2: Message for TheBadger – Interest RatesHello Jim:
My experience-to-date with using an interest rate higher than 120% of MT/AFR is limited: I am prosecuting two PLRs to do so; however, they are still in the mill and have not been resolved. Bottom line; your choices are: (1) get your own PLR; (2) wait for interest rates to rise; (3) go it alone with a higher rate (not recommended).
Plan design, operation & intergrity (meaning compliance) is always the responsibility of the taxpayer. The custodian/trustee of the assets works for you; not the other way around.
Neddless-to-say, I would always recommend that you (as well as others) buy the guide, particularly when going it alone. At a minimum it will provide 100% accurate information & numerous planning ideas. If you are not satisfied, you get your money back.
TheBadger
wjstecker@wispertel.net

2003-12-15 15:45, By: TheBadger, IP: [127.0.0.1]