switched custodian/missed 1 month distrib.
L1: switched custodian/missed 1 month distrib.I see from reading other posts that we can correct this missed distribution by filing for a make-up distribution. Is this the only thing we need to do? and is there a timeline? i.e. the payment missed was for March. Do we need to file by month-end (today) or can we wait a month to be sure that he doesn”t receive 2 distributions automatically in April?
Thanks!2008-03-31 12:36, By: JCP, IP: [220.127.116.11]
L2: switched custodian/missed 1 month distrib.All that is important is that during 2008, one full annual distribution is received – it makes no difference when during the year, just that itoccurs between 1/1 and 12/312008-03-31 12:43, By: Gfw, IP: [18.104.22.168]
L2: switched custodian/missed 1 month distrib.You shd be able to ask new custodian if 2 monthly payments are planned for April, and if not, tell them about the missed March one duringthe switchover, and ask them to issue an extra one to fix it. This is easy to correct. Just watch it for several months with the new custodian to make sure you consistently get same amount close to same date each month, until you get a comfort level with them. Ken2008-03-31 13:04, By: Ken, IP: [22.214.171.124]
L2: switched custodian/missed 1 month distrib.So there is no issue with changing custodians? All we need to be sure of is the monthly distributions continue? Is there an IRS publication this can be found in or a FAQ”s document? THANKS!2008-04-01 14:49, By: ces, IP: [126.96.36.199]
L2: switched custodian/missed 1 month distrib.The following is pasted from this site”s FAQs:
< Q. Can distributions be made monthly? A. While payments must be made at least annually, several letter rulings address the subject of monthly payments. PLR 8919072 - The annual distribution amount was distributed as 12 equal monthly payments. PLR 9050030 - The distributions were calculated as monthly distributions using a monthly compounding rate. In this ruling the remaining life expectancy was was converted to months by converting the fractional life expectancy to the nearest whole month. PLR 200105066 - The annual distribution was divided by 12 with the first payment to be made in July - only six payments were made in year 1 with the second annual payment calculated in January of the following year. >>>>>>>> >>>>>>>>>>> >>>>>>>>>
You do not even have to continue the montly payments, you could switch to quarterly or take a one time annual payment. The vital requirement is that as of year end, your full annual requirement has been withdrawn however it happens to be split between the two IRA custodians. You will also need to file a 5329 to claim the 72t exception, since both your 1099R forms are not likely to contain the “2” coding. Correct the shortfall any way you want, but double check your total in December to be sure it is correct. If you maintain monthly distributions, try to set the pay date to early in the month, so you will have time to make any corrections in December prior to the holiday rush.2008-04-01 22:00, By: Alan S., IP: [188.8.131.52]