Understanding the new PLR

L1: Understanding the new PLROK Guys_.please review and comment on the scenario below which represents my understanding of what’s possible based on the article about your newly approvedPLR. If my understanding is correct, the inclusion of a COLA is no longer necessary(my post of 1/19):
Mr X is age 50. He has established two SEPP accounts, Account A with a starting amount of $1,000,000 and Account B with $500,000. Account A is a conservative 5% per year account, Account B is a Growth fund.
Mr X establishes that he will calculate the SEPP distribution for each account, using the amortization method on December 15, 2004 for payout on January 5, 2005.
On December 15, 2005:
Account A Value = $1,000,000 120% midterm rate = 4.0% Life expectancy = 34.2 Payout for Jan 5 2005 = $54,163.32
Account B Value = $500,000 120% midterm rate = 4.0% Life expectancy = 34.2 Payout for Jan 5 2005 = $27,081.66
Total Payout for Jan 5, 2005 =$81,244 .98

Over the year 2005, Account A appreciates 5% and Account B appreciates 20%. In addition interest rates increase substantially. On December 15, 2005 Mr X recalculates his distribution for the next year:
Account A Value = $993,128.51 120% midterm rate = 5.5% Life expectancy = 33.3 Payout for Jan 5 2006 = $65,663.25
Account B Value = $567,502 120% midterm rate = 5.5% Life expectancy = 33.3 Payout for Jan 5 2005 = $37,521.86
Total Payout for Jan 5, 2006 =$103,185.11
This process of recalculation happens every December 15th for the remaining life of the SEPPs
Is this correct? Would using this approach require a PLR or is the one just approved sufficient?
Thanks, RBN2004-05-14 21:22, By: rbn, IP: [24.208.117.131]

L2: Understanding the new PLRCorrection: Line 11 of my post should read December 15, 2004 NOT December 15, 20052004-05-14 21:26, By: rbn, IP: [24.208.117.131]

L2: Understanding the new PLREvery PLR ends with a line similar to… “This document may not be used or cited as precedent. Section 6110(j)(3) of the Internal Revenue Code.”
Although many tax experts rely on these rulings to broadly interpret the position of the IRS on various issues, each ruling applies only to the taxpayer actually requesting it – and even then it is only good while the “facts and circumstances” of the PLR remain unchanged.
If you want to be 100% sure, you may want your own private letter ruling – especially since there has only been one on the subject since Rev. Rul. 2002-62.And don”t forget, the appreciation could be a -20% and you would still have to recalculate – much different than a COLA index that increases benefits at a constant rate each year.2004-05-15 05:49, By: Gfw, IP: [172.16.1.71]

L2: Understanding the new PLRI agree with your comment on the COLA and that the account could be defecit 20%, however, indirectly, the cost of living will be reflected in an increase in the interest rate used for calculations.
Also, I understand that the ruling only applies in that particular case but….is the basis of recalculation that Ive shown in line with the PLR? Also, if a new PLR were requested can it reference the approved PLR and what would the reference number be?
rbn2004-05-15 09:27, By: rbn, IP: [24.208.117.131]

L2: Understanding the new PLRgfw,
Still…… is the scenario presented in my original message consistent with the PLR?
RBN2004-05-18 05:39, By: rbn, IP: [12.151.162.13]