Taking lump sum from IRA after starting 72t distri

L1: Taking lump sum from IRA after starting 72t distriI have already begun my 72t distributions from my IRA. I am wondering if I can take a lump sum from this IRA and if so, what are the consequences? I realize that I will have to pay taxes as well as the 10% penalty but I”m curious if this will affect my 72t distributions.2007-10-12 13:08, By: Clint, IP: [76.222.201.166]
L2: Taking lump sum from IRA after starting 72t distriIf you want intelligent answers, then please present all of the facts. When did you start ? How old were you then ? How much was in the original SEPP account(s) used in the calculation ? Did you have a separate IRA account that could be used for “emergencies” like this one ? How much have you taken in distributions since you started ? How much is your annual calculated amount ?
If this is the first year you could take a lump sum now to bring your 2007 total up to your annual total, even if you started sometime during the year to take monthly payments, that frequency is immaterial. Only annual amounts count. Further, if this is your first year, in addition to this lump sum up to the annual total, you could take the entire 2008 annual amount in January 2008.
If your need is a timing one, not a permanent increase, then the above will work for you. If you are beyond the first year, then you will be subject to the 10% penalty on the cumulative total of all distributions to date. If your lump sum need brings your 2007 to more than your 2007 annual limit, then you will be “busting the plan”, and owe the 10% cumulative penalty.2007-10-12 15:06, By: dlzallestaxes, IP: [141.151.24.87]

L2: Taking lump sum from IRA after starting 72t distriIf you understand how the penalty on all 72t withdrawals works, and the possible interest they could tack on, then I will just cover the “if this will it affect my 72t distributions” part. From all of my reading on this site, the 72t plan ends in the year that you “bust” it, so you cannot just continue thepayments in future years, working towards your goal of passing 59 1/2 and having also taken at least 5 years of payments. I think you would have to “wipe the slate clean” after paying all of those penalties, etc., and start over with a new 72t plan that next year,but I may be wrong. KEN2007-10-13 06:06, By: Ken, IP: [75.67.65.254]

L2: Taking lump sum from IRA after starting 72t distriIf the IRA that you are considering using to take the lump sum distribution is part of the SEPP then as previously stated, you will bust the plan and owe a 10% penalty on all previous distributions and past due interest of the penalty taxes back to the time when they should have been paid. If under 59.5, add another 10% for the limp sum. As Ken pointed out, the plan terminate is you bust it.
You really might want consider any other possible source of funds – it would probabgly cost a whole lot less.2007-10-13 06:40, By: Gfw, IP: [24.148.16.150]