72t
Can you please confirm when a 72t is complete.
example……
Client began 72t 8/15/2001 – turns 59 1/2 on 2/1/2009 – Client was taking monthly distributions on the 5th of each month. Does the client need to satisfy his February distribution or can we end it on 2/1/09.
example…..
Client began 72t 8/15/2001 – turns 59 1/2 on 3/23/2002 – client would have to continue the 72t for 5 years….When exactly would the last required distribution need to take place – 7/15/2006 or 8/15/2006
Permalink Submitted by Alan Spross on Tue, 2009-02-03 20:36
In both of these cases, 60 months of distributions were taken, so you are dealing with a final “stub year”.
In the final calendar “stub year” there are several options that are acceptable to the IRS:
1) Take nothing
2) Take a pro rate of the annual amount
3) Take the full annual amount
In the first example, there is no Feb distribution required and the January distribution is optional.
In the second example, the distributions can stop once 60 months have been taken. The July, 2006 distribution would be the final monthly distribution required. The date of the month is not important, as a distribution can be taken at any time of the month if it is required for that particular month. The 7 months worth for 2006 could all have been taken in January for that matter.