SEPP involving multiple accounts
L1: SEPP involving multiple accountsI was forced to transfer an illiquid holding from my Schwab IRA account from which I had been taking SEPP’s for about a dozen years, to a new IRA established at another firm.
I am subject to pre-1/1/2003 rules.DOB 7/24/1963. Date of first distribution Jan 2001.
The ‘new’ IRA holding the illiquid position does not have sufficient cash (and likely will never) to cover the required annual SEPP based on its’ 12/31 market value.
1) Can i take the required SEPP from the original Schwab account only? (I would use combined FMV figure to arrive at total.
2) Can cash be transferred to cash-starved IRA (holding illiquid position) from Schwab IRA in order to have funds available to distribute? New IRA would be subject to its own SEPP calculation.
thanks for any help you can provide.
2014-04-01 17:07, By: schwabbie, IP: [18.104.22.168]
L2: SEPP involving multiple accountsOK, I can see several issues coming into question here, so perhaps we can narrow this down somewhat:
1) What is your impression of howexisting 89-25 plans were affected by Notice 2002-62?
2) Who or what forced you to transfer the holding to a new account/custodian? Schwab? Was it done by direct trustee transfer?
3) Excluding those partial transfer IRS rulings which were inexplicable, both these IRA accounts are still in your SEPP universe. Your first question suggests that you are not using a fixed dollar method, so what method are you using?
4) You have a 22 year plan here, which is over twice as long as those that typically run into problems of inapplicability to their situation. They also create about 3 times the penalty due to potential retroactive interest and penalty.Distributions in kind can be done to meet the SEPP calc if you run out of cash. Do you anticipate that this could occur?2014-04-01 22:58, By: Alan S, IP: [22.214.171.124]