Blowing a 72t

Submitted by Stephen Rosenberg on Tue, 2009-10-06 16:38

I have a client who started taking 72t distributions last year. Now she needs to take out a large chunk. I understand that she will have to pay a 10% penalty on her previous distribution plus this new $50,000. My question is: does she still have to continue the 72t or can she stop it because she would have already paid the 10% penalty?

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Permalink Submitted by mk foss on Tue, 2009-10-06 17:28

Once it’s blown, it’s over. The payments are not required for later years. She will need to pay interest as well as the 10% on last year’s withdrawal.