geoegg asks,

I am 52 years old and planning to do a 72t distribution from my IRA. My question is rather specific because I have done alot of research on the pro's and con's.

My Brokerage firm (a big one) has a disclaimer that they accept no responsibility for the tax issues and I should consult a tax specialist. Since they are calculating the annual withdrawal it seems strange that they don't (at least) take responsibility for the calculation.

I am using the single life annuitization method which seems to be a pretty simple calcualtion.

Any fools out their who have done a 72t, have experience with the calculation, and can give me their thoughts about needing a tax expert to confirm what looks pretty simple?


(1) Every brokerage firm I've ever seen disclaims any responsiblity for tax issues -- even as they aggressively pedal tax saving schemes of every species and description. I'd be very surprised if you were able to find one that took responsibility for anything.

(2) I been taking 72(t) withdrawals for 4 years and done the calculations myself. See the following link for info on 72(t) withdrawals,

http://www.geocities.com/WallStreet/8257/wdraw59.html

As you've found, the calculations are really very simple. I believe the decision to hire a "tax expert" rests more on your willingness to accept responsibility for making the calculation yourself, or hiring someone else to "take the blame" if an error is made. But be forewarned, having a "tax expert" prepare your return doesn't exempt you from IRS penalties if an error is made. Make sure your "tax expert" has adequate "error and ommissions" insurance and that you have adequate funds outside your IRA to pay any penalties. You may well have to take your accountant to court to recover damages if an error is made. This could take years. The IRS will want you to pay the penalty and interest charges immediately.

intercst