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sepp violation

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Bysarah

L1: sepp violationI started taking SEPP distributions in 2003. In 2004, 2005 and 2006 I took excess distributions without realizing the consequences of penalties. I turned age 59 _ in mid-2004. I must continue to take excess distributions from my IRA is order to pay bills. Here are my questions.
1. Which distributions will be assessed 10% penalties: SEPP distributions, excess distributions, both pre and post age 59 1/2.?
2. Is there a way to void the contract and take what I need without a penalty going forward? 2006-04-14 16:55, By: sarah, IP: [216.210.177.45]

L2: sepp violationHello Sarah:
You will owe the 10% surtax on ALL distributions taken before your 59 1/2 birthday. Distributions after your 59 1/2 birthday are just regular distributions.
TheBadger
wjstecker@wispertel.net

2006-04-14 17:21, By: TheBadger, IP: [66.109.211.254]

L2: sepp violationWouldnt there be the 10% penalty because although the 59 1/2 requirement was met the 5 year from the start of the distribution hasnt been met yet?2006-04-14 18:56, By: ED, IP: [68.38.141.46]

L2: sepp violationHello Ed:
Although not at my finger-tips, the IRS has ruled on this issue and is indirectly discussed in Pub. 590. If a taxpayer “modifies” their SEPP plan the 10% surtax plus interest applies in full but only until such other exception applies: death, disability, attaining age 59 1/2 or any other exception.
TheBadger
wjstecker@wispertel.net
2006-04-14 19:24, By: TheBadger, IP: [66.109.211.254]

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