72t
Does all money used to calculate a 72T dist have to be in the same acct or can it be in multiple accts and the withdrawal come from just one?
Does all money used to calculate a 72T dist have to be in the same acct or can it be in multiple accts and the withdrawal come from just one?
Permalink Submitted by Alan Spross on Tue, 2008-09-30 22:56
Short answer – Yes, multiple accounts are OK with aggregated distributions.
A 72t plan can apply to any number of IRA accounts, but should not include any non IRA accounts such as a 401k. Any 401k based 72t must be a separate plan for each 401k.
IRA accounts can first be created by direct transfer so that an optimum starting balance for all the IRAs in the plan will generate the needed amounts to the end of the plan. Documentation of the plan calculations should clearly identify which IRAs are included, and then great care must be taken not to contribute to or take any distributions other than 72t distributions from any of those accounts.
If only one of the accounts is supplying the distributions, the custodian is not likely to code the 1099R with the penalty exception. Therefore, the taxpayer will need to attach Form 5329 to the return to claim the penalty exception.