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Greetings, FattigGutt, and welcome. You asked:

I have read your posts and others on IRA distribution and think I understand them. But now USA TODAY 1/17/01 front page has an article stating there are new less restrictive rules effective immediately. Are you aware of this?

I must take two distributions this year. (Too many cap gains to take one last year) So this is not just an academic exercise for me. I have tried to search the IRS site but don't see any changes in 590 yet.

Yes, I am aware of the change announced in proposed regulations issued by the Treasury Department/IRS a week ago. It's so new that Publication 590 is useless and better used as a paperweight whaen it comes to deciding how to take minimum required distributions from an IRA.

I'll be writing an article to appear as a Special column next week. In the interim, be aware that you may use the old rules or the new effective immediately. The new ones greatly simplify the requirements and no longer lock in your beneficiary decision for after-death payouts after you turn 70 1/2 and begin MRD.

In essence, you will now use the MDIB table in Appendix E of Pub 590 for the factor. However, if you have a spouse more than 10 years younger, you may use the joint life expectancy table. That's the only exception to the new procedure. Everyone else uses the MDIB table to find the life expectancy factor, divide that into the IRA balance as of December 31 of the prior year, and then in succeeding years look up the new factor for that year's age and do it again.

The new rules will reduce the minimum required withdrawal for most IRA owners, and will allow any beneficiary to be designated up to Dec 31 of the year following death. That beneficiary will then be allowed to take the balance of the IRA over the beneficiary's attained age at that time.

All in all, this change has greatly simplified estate planning and rendered moot all previous discussions of how to take the money and who to name as a beneficiary before MRD begin.

Stay tuned.... Film at eleven.
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