Split Custodian

You are here:
< Back

L1: Split CustodianI presently have a 72T, which I am considering moving part of the balance to another custodian or bank. I will keep the multiple custodians as my72T universe and continue to make annual SEPPpayments from thefirst custodians account.Are there any issues in my splitting the 72t?Thanks,Bob2008-07-25 17:40, By: car-tows, IP: []
L2: Split CustodianAs long as the transfer is to a fresh new IRA account with no prior balance, you should not have a problem. You will simply have a SEPP universe with an additional account funded by a transfer from a current SEPP IRA account.
However, theremay be a very small exposure due to PLR 2007 20023, which you can research further on this site. In this case, the IRS busted a plan for doing exactly what you propose, however this case is generally considered an aberration since the IRA has been unable to explain it, and there is no evidence out there of further problems with any of the thousands of these partial transfers that have been done over the years. I don”t think there is any way to measure how much risk you would have by doing this.
You may also have to file a 5329 to claim your penalty exception if you do not already have to because your current custodian will have more reason to code your 1099R with a “1”.2008-07-25 18:06, By: Alan S., IP: []

L2: Split CustodianI think Alan has a typo, and means IRS not IRA that can”t explain its position. But that”s nothing new !!!2008-07-25 20:33, By: dlzallestaxes, IP: []

L2: Split CustodianRight – the IRS it is.2008-07-25 21:01, By: Alan S., IP: []