No. of Recommendations: 0
Dr. Merlot, chock full of questions in a seemingly never-ending stream (and I just can't at all imagine why he has them), pursues the topic of "substantially equal periodic payments" by asking:

<<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?>>

Yes. Just view it as a redemption within the IRA to get cash for a distribution. On receipt of the cash, you purchase stock. Your holding period starts on the day of purchase (i.e., distribution from the IRA), and your basis is the purchase price (i.e., the market value on the date of the share distribution from the IRA). Thus, unless you're saving broker's fees via the transfer, that's why I see no distinct advantage to the share transfer.

<<Q2a: Does this still hold if I use my IRA#1 for my SEPP and my IRA#2 for the educational expense withdrawals?>>

No. It only pertains to the IRA(s) you are using for the early distributions.

<<Q2b: If "yes", then could my wife use her IRA#1 for the educational expense withdrawals without negating my allowed SEPP?>>

How did your dear wife's IRA(s) get into the mix? What she does with hers has nothing to do with what you do with yours. If she is not using them for SEPP, then she is perfectly free to use them for qualified educational expenses for your children.

You are into a very complicated area here fraught with peril. If you are looking to do "out of the ordinary" withdrawals for these distributions, then I advise you most strongly to not act without obtaining competent professional advice. My comments here are of a general nature and should not be construed as a recommendation or as advice for your specific set of circumstances. In short, lay out a few bucks and go see the expert who can design an early withdrawal program for you that best meets your needs.


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