Restarting 72 payment

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L1: Restarting 72 payment#1Individual deposited funds into an IRA in September of 2009. Immediately withdrew about $35,000 for condo purchase. Individual then started 72 distribution later in September and also for months of October, November, December 2009, and January 2010.He/she did not take a distribution in February but will restart same 72 distribution in March and for remainder of 5 year period.Can this person take an extra 72 distribution during 2010 to make up for the skipped distribution in February and avoid breaking the original 72t distribution? #2.Same information as above, except the individual transferred the $35,000 plus interest back into the 72tIRA in February 2010(these are the funds that were withdrawn in September of 2009).Again, can the individual restart the 72t distribution in March 2010 and take an additional distribution during the year to make up the skipped February withdrawal? If the $35,000 deposit plus interest is an issue, can they transfer these funds out into an 2nd IRA?Thanks,Bob2010-03-01 21:34, By: Bob, IP: []
L2: Restarting 72 payment#1What value did they use as starting balance for SEPP plancalcs in SEPT 09.. was it the total IRA value BEFORE or AFTER taking out the $35,000 from your IRA.Do you have a printed copy of the details that make up the balance that you used? If the “after” IRA value was used, then you will need to pay the taxes and the 10% penalty on the $35,000 early withdrawal that was taken before the SEPP started, (assuming you thendid the math correctly after that) but youcould have avoided that problem somewhat by just taking a full year distribution in the year 2009 during those last 4 months, instead of taking that extra $35,000, but I am guessing the sum of the $35,000 and the 4 payments taken does not equal the full year calculated withdrawal total. If the before $35k withdrawalvalue was used to compute the SEPP payments, I think you already have a mess on your hands, since the 2009 withdrawals are probably not correct. They could have been either 4 months worth ora full year’s worth in 2009, if first payment was received in September, but I am guessing it was neither, if the $35,000 withdrawal is included as part of youSEPP payments in 2009. If before value was used, but then youonly tookthose 4 months of payments in 2009, they took wrong amount, since calc used wrong beginning balance. This would be easier to comment on with real $$ values for fund that was used in calcs, and attained age in 2009, payment method used, annual payment amount $ amount, and int rate used in the calcs, etc.If your plan (aside from $35K problem) is correct, and you did not take FEB ’10 payment, you can just make it up by taking an extramonthly payment before December.#2- None of what you pose here makes sense, and will not work. You have missed the 60 day window for putting money back that was taken out of an IRA, and as I stated before in #1, you cannot addmoney to an active SEPP IRA. The early penalty and taxes are due on 2009 return for the $35k withdrawal. Adding back the $35,000 withdrawal will not help avoid any of the problems that may have been created, and in fact, it will bust the SEPP plan on its own, since you cannot add to a SEPP IRA after the plan has started.If you are the person doing these things, you really need professional help, as you may have quite a mess on your hands in just 6 months. You may be able to pay the 10% penalty on all of the 2009 withdrawals (unless you actually used the after value and then took the correct 4 months worth of payments in 2009), and then you could go back and using the year end 2009 balance you can start over and recompute a newSEPP for 2010, and after subtracting what you have already taken so far in 2010, make sure you take the rest out by December 2010. I would seek professional help if I were you. KEN2010-03-02 03:43, By: Ken, IP: []

L3: Restarting 72 paymentAnd if he’s the financial advisor or broker who improperly advised the taxpayer, thenhe better have a lot of professional liability coverage because he’s going to need it.2010-03-02 03:52, By: dlzallestaxes, IP: []