Permalink Submitted by Mike Raitt on Wed, 2016-04-27 23:25
Can i add money to an IRA account that is paying out 72t distributions that was calculated using the fixed amortization single life method? Seems like I can since the 72t distribution amount is calculated 1 time on 1 of the 2 previous months ending balances. Since I have to use 1 of the 2 previous months ending balance and since the 72t amount will never be recalcuated under the above mentioned method, it seems like a new deposit into the account after the selected month-end date would have no impact on the future payments. Seems like everything I read seems to say you can’t make any new additions to the IRA once you start the 72t, but it seems like there would be an exception if I was using this particular 72t calculation method (namely, the “Fixed Amortization Single Life table” method.
Permalink Submitted by Alan - IRA critic on Thu, 2016-04-28 00:14
No contribution can be made to an IRA that is part of a 72t plan or the plan is busted. That applies regardless of calculation method per this quote from RR 2002-62:
(e) Changes to account balance. Under all three methods, substantially equal periodic payments are calculated with respect to an account balance as of the first valuation date selected in paragraph (d) above. Thus, a modification to the series of payments will occur if, after such date, there is (i) any addition to the account balance other than gains or losses, (ii) any nontaxable transfer of a portion of the account balance to another retirement plan, or (iii) a rollover by the taxpayer of the amount received resulting in such amount not being taxable.
However, you CAN make a new contribution to a another IRA account this is not associated with your 72t plan.
Permalink Submitted by Mike Raitt on Wed, 2016-04-27 23:25
Can i add money to an IRA account that is paying out 72t distributions that was calculated using the fixed amortization single life method? Seems like I can since the 72t distribution amount is calculated 1 time on 1 of the 2 previous months ending balances. Since I have to use 1 of the 2 previous months ending balance and since the 72t amount will never be recalcuated under the above mentioned method, it seems like a new deposit into the account after the selected month-end date would have no impact on the future payments. Seems like everything I read seems to say you can’t make any new additions to the IRA once you start the 72t, but it seems like there would be an exception if I was using this particular 72t calculation method (namely, the “Fixed Amortization Single Life table” method.
Permalink Submitted by Alan - IRA critic on Thu, 2016-04-28 00:14
No contribution can be made to an IRA that is part of a 72t plan or the plan is busted. That applies regardless of calculation method per this quote from RR 2002-62:
However, you CAN make a new contribution to a another IRA account this is not associated with your 72t plan.