Recalc & 2002-62

L1: Recalc & 2002-62If a distribution has been under the annual recalc amortization method, can it be continued under 2002-62 ormust we stop the recalc, and continue to use the 2002 annual amount for the remaining SEPP period?
The participant can still modify to the one time RMD ridiculous reduction if s/he chooses right?2003-01-03 12:43, By: Gary Charlebois, IP: [127.0.0.1]

L2: Recalc & 2002-62As is usual, a new revenue ruling fixes 10 issues & creates 5 new ones.
Given that you plan commenced prior to 12/31/02; it gets to continue as is; as it was an approved plan/methodology in that era. There is no requirement in RR 2002-62 to update one”s “in progress” plan.

Next, the new ruling only allows taxpayers who were using the FIXED amortization/annuity methods to switch to the new RMD method. Thus, if your old program was using annual recalculation then it was not fixed, therefore ineligible for the switch. The ruling itself is clear & I suspect the IRS specifically targeted people on the old fixed methods as the people needing the most help. Whether they specifically intended to exclude annual recalc programs is not clear.
TheBadger
wjstecker@wispertel.net
2003-01-03 12:56, By: TheBadger, IP: [127.0.0.1]

L3: Recalc & 2002-62The Badger sure is right. For every question answered, there are 10 new ones. In one section of 2002-62, the IRS definately uses the word FIXED. However, in Section 3, they merely state…

If a series of payments commenced in a year prior to 2003 that satisfied 72(t)(2)(A)(iv), the method of calculating the payments in the series is permitted to be changed at any time to the required minimum distribution method described in section 2.01(a) of this guidance, including use of a different life expectancy table.
Question: Does the initial method have to be fixed? According to Section 2.03(b) then answer is yes. However accoring to Section 3, the answer may be no.2003-01-03 13:40, By: Gfw, IP: [127.0.0.1]

L2: Recalc & 2002-62The Badger sure is right. For every question answered, there areten new ones that pop up.
In Section 2.03(b) the IRS definately uses the word fixed. However in Section 3, they merely state…

If a series of payments commenced in a year prior to 2003 that satisfied 72(t)(2)(A)(iv), the method of calculating the payments in the series is permitted to be changed at any time to the required minimum distribution method described in section 2.01(a) of this guidance, including use of a different life expectancy table.
Does the initial method have to be fixed? Section 3 seems to allow a change from any method (including the old MD method) to the new rules and the new table.2003-01-03 13:45, By: Gfw, IP: [127.0.0.1]