Repay a 72-q
I have a client who started a 72-q earlier this year… Due to some positive, but unforeseen circumstances, he no longer needs the income, and prefers not to pay the tax… Is it possible to “undo” the 72-q, and repay the distributions without taking a penalty?
Permalink Submitted by Alan - IRA critic on Thu, 2013-10-31 04:40
A NQ annuity does not have rollover options of an IRA, so client is stuck with the taxable distribution and penalty on the taxable portion. At least he will be able to preserve the undistributed balance in the annuity. He should also check if he qualifies for a penalty exception other than a 72q (SEPP) plan.