72(t) help
In the November 2008 newsletter, on page 7, it is stated that a 72t series of payments can be modified due to death or disablility. Do you know where we can find the definition of disabled for the purpose of getting additional money over and above the 72t? The client is over 59 1/2 but is only 4 years into the 72(t) and would like to withdrawl more money.
Any help would be appreciated.
Permalink Submitted by Alan Spross on Tue, 2008-10-28 19:53
The following is copied from the 72tonthenet website. I would start with securing a written statement from client’s MD that conforms to the following tax court finding:
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Q. What is the Definition of Disability for 72(t)??
A. The definition of disability can be found in IRC Section 72(m)(7). In one case,Dwyer v. Comm., 106 TC No. 18 (1996), the Tax Court agreed with the IRS and stated…
For purposes of this rule, an individual is considered disabled if “he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and infinite duration.” The Code specifies that an individual must be able to furnish proof of his disability in whatever form and manner that the Service may require. The court noted that the regulations under Section 72 also state that an impairment that is remediable does not constitute a disability.
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Permalink Submitted by Al Fry on Thu, 2008-10-30 02:39
Asl the custodian what they want as proof. The coding on the 1099-R will generally be accepted by the IRS.