72T valuation date

Submitted by MIKE KRUCHTEN on Mon, 2023-12-18 00:11

Client has a IRA valued today at 1 million, plan is to transfer 200k of it to another IRA by year end then 72T the 800k IRA in Jan 2024.

First monthly distribution will be 1/5/24 and will use Dec Mid Term rate due to their high level at the moment. My calculations are using 800k but on actual draft date (1/5/24) value could be slightly higher or lower. How does IRA determine valuation value? Do I print the 1/5/24 intraday statement or do they use prior month end? Only problem if they use prior month end is 200k transfer May not take place by 12/31/23.

Any info would be much appreciated!!



Submitted by Alan - IRA critic on Mon, 2023-12-18 02:34

  • The initial account value can be on any day which the client can clearly document the balance, but not prior to the transfer out. If the transfer can be done prior to year end, normally the 12/31 value would be used as it will show on the Dec statement without having to make a screen print for a date other than a month end.
  • Notice 2022-6 states the following:
  • “The account balance will be treated as determined in a reasonable manner if it is the account balance on any date within the period that begins on December 31 of the year prior to the date of the first distribution and ends on the date of the first distribution.”
  • But remember that no contribution or distribution from the 72t IRA can be done between the account balance date and the date of the first 72t distribution.

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