Must IRAs be aggregated to calculate substantially equal periodic payments?
November 4, 1999 Question: I have multiple IRAs. When taking substantially equal periodic payments from an IRA prior to age 59-1/2, do I need to aggregate all my IRAs for the purpose of calculating the required distribution amount, or can I segregate one IRA for purposes of determining the required distribution amount? Answer: The IRS has been liberal in allowing IRA owners to determine the proper amount of substantially equal periodic payments from an IRA, for purposes of meeting the exception to the 10% penalty tax on distributions before age 59-1/2 contained in IRC 72(t)(2)(A)(iv) — the amount can be determined separately for one IRA without regard to another IRA owned by the same owner. See, for example, PLRs 9824047 and 9747039. By separating an IRA into two separate IRAs, you can reduce the required distribution amount.
Related Questions
- How are annual, substantially equal periodic payments determined for purposes of the required minimum distribution method, the fixed amortization method and the fixed annuity method?
- Are there new rules that may be used for calculating substantially equal periodic payments under section 72(t)(2)(A)(iv)?
- Must IRAs be aggregated to calculate substantially equal periodic payments?
