Quaterly Withdrawals

L1: Quaterly WithdrawalsI’m working with a CPA to begin a SEPP withdrawal. I would like to take the distribution quarterly. He has two concerns with doing that. First, the rule doesn’t say you can. It only speaks to annual distributions. Secondly, he’s concerned that if you take the distribution quarterly it should be ammortized quarterly. In other words, using the number of quarters in my life expectancy not he number of years. This method would yield a different amount. My thought is just to calculate the annual distribution and divide it by 4. Are there precidents to support either position? Thanks2003-09-26 14:31, By: Les, IP: [127.0.0.1]
L2: Quaterly WithdrawalsHello Les:
(1) The IRC specifically says “not less frequently than annually” making the distribution frequency test a one-sided test only; as a result, any frequency (including random) within the year is just fine. Further, in this regard, without my going back & actually counting, I would guess that there are two dozen PLRs that support this.
(2) Cerainly, you can amortize the principal quarterly if you so choose; e.g. divide the interest rate by 4 and multiply your LE by 4 and you will get a slightly less amount; again, however, there is no need, the IRS has ruled repeatedly that the actual amortization of the principal balance need not be adjusted to reflect the intra-year frequency of distributions.
Lastly, (and particularly if your current CPA continues to give you a hard time), I would consider hiring a new CPA who is better versed in IRC 72(t) matters.
TheBadger
wjstecker@wispertel.net

2003-09-26 15:34, By: TheBadger, IP: [127.0.0.1]

L2: Quaterly WithdrawalsBadger,
Thanks for the response. My CPA is not giving me a hard time, he’s just try to keep me out of trouble.
Les2003-09-30 06:16, By: Les, IP: [127.0.0.1]