L1: Traditional IRACurrently have one large traditional IRA. The 72t distributions from the three methods are more than needed. Calculated what the SEPP account should be to get the annual distribution needed. Therefore, I will be setting up a new IRA account and move the funds needed. Question: How long does the new account need to be set up before establishing 72t distributions? I plan on starting distributions in 2016
Thanks!2015-11-11 19:32, By: snowdog, IP: [184.108.40.206]
L2: Traditional IRAYou are undertaking what is known as account partitioning or fracturing. Most critical, this should be totally completed before requesting your first SEPP distribution. You should also move the funds by non reportable transfer, not by rollover. Once the account you will use for the SEPP is established, the only funds moving in or out of that account must be your SEPP distribution. (You can do a later full transfer of the SEPP IRAto yet another new SEPPIRA account later if you wish, for example to change custodians).
In establishing the account for your SEPP, give some thought to which investments you want in that account. Avoid the most volatile and illiquid investments. If you move a stock that is ex dividend to the new account, the dividend payment can go into either account since it is not a contribution, but it CANNOT be transferred to a different account once paid into the other account. Check with your broker to be sure that cannot happen. If you are not confident about their response, then wait around 6 weeks after the partitioning so ex dividend payments on transferred stockswill have been processed. Should any transfer occur during this period, you will have to use a later account balance date after the last transferfor your SEPP calculation.
Since you plan for your first distribution to be in 2016, doing the partition now will provide you with the 6 week leeway should you need it.2015-11-11 23:50, By: Alan S, IP: [220.127.116.11]
L3: Traditional IRAThanks for the quick thorough reply. Have a great weekend!!!2015-11-13 18:27, By: snowdog, IP: [18.104.22.168]