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URL:  http://boards.fool.com/drmerlot-ltltwhat-i-dont-understand-is-the-10163958.aspx

Subject:  Re: Exicise tax avoidance and IRA distributions Date:  4/25/1998  6:01 PM
Author:  TMFPixy Number:  3039 of 80000

DrMerlot,

<<What I don't understand is the statement in Chapter 5 page 22 of IRS IRA bulletin which is "You must use an IRS-approved distribution method and you must take at least one distribution annually for this exception to apply." This could mean some integer multiple of the exact amount required by the life expectancy method within a give year. What do you make of it?
Also where can I get a copy of Section 72(t)?>>

Any good library will have a copy of the Infernal (sic) Revenue Code from which you may copy that section.

The statement means that you may take 365 distributions or just one during the year, the total of which equal the distribution required by the method you selected for the exception.

Section 72(t)(2)(iv) stipulates that funds may be withdrawn from an IRA or qualified retirement plan at any age prior to 59 1/2 without incurring the 10% excise tax (penalty) on those withdrawals provided they are part of a series of substantially equal periodic payments made over the participant's life expectancy or the joint life expectancy of the participant and a designated beneficiary. There are three approved and acceptable methods for receiving these payments, all of which result in a different sum paid to the recipient.

Minimum distribution method. In this method, the number of years of life expectancy for the participant or the joint life expectancies of the participant and a benefirciary is determined using the IRS life expectancy tables found in IRS Pub 590. The account balance as of the beginning of the year is divided by the number found in the applicable table, and the result becomes the amount that must be withdrawn in the first year. In the second and succeeding years, the required withdrawal amount is recalculated based on the new beginning balance in that year in one of two ways: reduce the life expectancy used in the first year by one and use that as the new divisor; or, find the new life expectancy b