split IRA 72t
I have a client who started 72t distributions a few years ago. Now the client may want to partially transfer part of this IRA to another custodian. If I kept the original amount coming out of the original IRA after the transfer out, would this in any way violate the original 72t?
Permalink Submitted by Alan - IRA critic on Tue, 2015-10-27 23:36
It might. The IRS has issued a PLR busting a 72t plan for a partial transfer (PLR 2007 20023). However, their explanation for this ruling made no sense, and thousands of people have done partial transfers since with no problems. Therefore, the risk of the IRS busting the plan is very small, but nonetheless does exist. I would disclose this risk to the client and let client make the call.