When 72t plan begins = Distribution
L1: When 72t plan begins = DistributionThere have been numerous posts relating to the month a 72t plan begins. This is critical for any number of reasons, but I recall that some of the posts seem to assume that their plan began when theyRECEIVED their first distribution. This got me to thinking, and while I was unable to find a specific reference, all the anecdotal information adds up to the distribution date and NOT the receipt date as governing.
So if you ordered your first payment on July 28th, it was processed by the custodian on July 31st and you received it on August 4th, your plan started in July, not August. Therefore, you cannot use the July interest rate. In December, this situation would take on added urgency because the 1099R figures are based on the processing date of the IRA custodian, so use of receipt dates would put you totally out of sync with tax reporting procedures.
This does not change the basic advice of not ordering distributions late in the month since you have very limited control of when that distribution will be processed.
I don’t imagine this issue comes up very much in IRS inquiries, but it could…………
2009-08-31 04:00, By: Alan S., IP: [184.108.40.206]
L2: When 72t plan begins = DistributionYou will find the reference to the “date of the first distribution” in 72(q)(3)(B)(i), 72(t)(4)(A)(ii)(I), Arold v Commissioner, the Benz case (GREGORY T. AND KIM D. BENZ, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, respondent), and a few other places.
The start date has everything to do with the date the first distribution occurs and nothing to do with the date the distribution is received. 2009-08-31 10:15, By: Gfw, IP: [220.127.116.11]