Which mid-term rate for Feb 16 distribution?
L1: Which mid-term rate for Feb 16 distribution?
THANK YOU to everyone contributing to this site! Setting up a new SEPP annual distribution. 56 years old on June 15. Using the Single Life expectancy table and the Amortization method. Ideally, I will submit my SEPP request to my broker TOMORROW. My question is: which FED MID-TERM rate should I use? Most of the online tools are showing 2.62% for a February distribution (including thecalculator on this site). However, my CPA says I need to use the rate from two MONTHS PRIOR to the actual distribution date (which would beDecember). If he is correct then I would need to use 2.54% rather than 2.62%. Can someone clarify whether to use 120% of the CURRENT month mid-term rate or 120% of the 2 month prior mid-term rate?
Thanks in advance.
2018-02-15 20:33, By: tomahawk, IP: [220.127.116.11]
L2: Which mid-term rate for Feb 16 distribution?
Your accountant/CPA is wrong….
Revenue Ruling 2002-62 and Qualified SEPP Plans post 12/31/2002:The interest rate that may be used is any interest rate that is not more than 120 percent of the federal mid-term rate for either of the two months immediately preceding the month in which the distribution begins.
Hope this helps.
2018-02-15 20:41, By: Gfw, IP: [18.104.22.168]
L3: Which mid-term rate for Feb 16 distribution?
Very few tax practitioners understand SEPP 72-T. I assume that your CPA is a tax practitioner, but interestingly over 90% of CPAs do NOT prepare tax returns, so “being a CPA is not a criteria for preparing tax returns”, and there are many non-CPAs who are excellent at preparing tax returns, such as Enrolled Agents (EA) who specialize in only handling tax matters.
Possibly yours mis-read the regulations too quickly.
2018-02-16 00:49, By: dlzallestaxes, IP: [22.214.171.124]