Valuation dates for 72T
I have a customer who is looking to start a 72T distribution in March. What options does he have for account value dates? Can we use valuations at the end of February 2021? And, would we then use the February 120% Funds rate figure to calculate his distribution?
Permalink Submitted by Alan - IRA critic on Wed, 2021-02-17 17:56
The higher of the interest rates for the two months prior to the first distribution month applies, thus the Jan or Feb 120% rate. The account balance could be the 2/28, 1/31, or 12/31/2020 balance. The account balance date is independent of the interest rate month selected. With today’s low rate, it is best to use the highest account balance available, and if that balance generates too large a distribution, the IRA should be partitioned before starting the plan. No distribution or contribution can be made between the date used for the account balance and the first 72t distribution.