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Dear Pixy: Thanks again. These IRA laws get curiouser and curiouser. I again have follow-up questions.

<Q1: When I start the payouts, do they have to all be in cash? Could part of the payout
be in securities with the value of the securities at withdrawl plus any cash equal to the

It's possible, but I'm not sure what would be gained by doing so. You would have to get
the broker to transfer whole shares to your taxable account. Your holding period starts on
that date, and the share basis will be the market value on that day. Your 1099R for the
distribution will include that total plus any cash sent to you, and that's the total reportable
distribution on which you must pay income taxes.

Q1a: Does this mean that if I sell the securities at a loss before 1 year, it's a short term loss or after 1 year a long term gain?

<Q2: If I want to help my son and daughter for graduate degrees ( i.e. books and
tuition) through IRA withdrawl, do I need to count those help $$ as part of my SEPP or
are they a separate permissible use?>

What an interesting question. You're asking if you may use two of the exceptions to
penalty-free withdrawals at the same time, one of which is the "substantially equal periodic
payments option." The only interruptions to the latter that are authorized are withdrawals
caused by death or disability. Any other distributions cause all prior SEPP withdrawals to
be penalized. Therefore, because I find nothing in the Infernal (sic) Revenue Code to allow
SEPP and education expense withdrawals to be made concurrently from the same IRA,
IMHO you cannot do so without voiding the SEPP.

Q2a: Does this still hold if I use my IRA#1 for my SEPP and my IRA#2 for the educational expense withdrawals?
Q2b: If "yes", then could my wife use her IRA#1 for the educational expense withdrawals without negating my allowed SEPP?
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