stub payments/fiscal vs. calender

L1: stub payments/fiscal vs. calenderSituation: Client”s DOB is 4/10/1952. Client started distributions in November 2006 with a full year distribution amount of $3,832.61. If the client wishes to change to monthly distributions in 2008, client can end distributions in October of 2011 (exactly 5 years and turned 59 1/2).
A couple of questions:
1) Is the IRS more concerned about the fiscal year dollar amount or the calender year dollar amount? Since client took full years amount in 2006, the fiscal amounts will not be the same, and if client takes stub payment (pro-rata) in 2011, the 1099 will be smaller for year 2011. The reason I ask is thatfor posting on 1/31/06from Brandon, you say calender year, and for posting on 12/4/06 from RetirementBob you say fiscal year.
2) Should client take a full years distribution amount in 2011, so that all calender years are the same?
3)Would a stub payments for the first payment, mixed with full year payments (say for the last year)be a violation of the rule?2007-01-23 08:10, By: 72(t)researcher, IP: [12.20.48.10]

L2: stub payments/fiscal vs. calenderI am under the impression that there is not much IRS clarity on the final stub year issue, and if you avoid obvious inconsistency you should be OK. The only affect the first stub year treatment should have on the last is that a full first year payment should eliminate the need for any final year payment when the 5 year period governs. In this case 5 years is longer than age 59.5 by a month. So for 2011, client should be able to take either -0- before the modification date or pro rate the year, the -0- option being available because he has already taken 60 months of distributions.
Only $3,800 for a full year? Seems very small for a SEPP, but the risk of busting is equally small.
2007-01-25 21:45, By: Alan S., IP: [24.116.66.98]