No. of Recommendations: 15
Call me sick & twisted; but I got the opportunity to get on Lexis for a couple of days. Lexis actually has a better/deeper tax library than does CCH. I researched all (and I do mean all) PLR's relevant to §72(t)(2)(A)(iv). I got 56 PLR's plus 1/2 dozen TCM's & related junk. Of particular interest are the PLR's from 88,89,90 which I had not previuosly seen. When evaluating all 56 PLR's, a couple of issues have become pretty clear:

1. Interest rates run all over the ball park from a low of AFR mid-term rate to a high of 10.6%.

2. Prorating the first year of SEPP's is acceptable; e.g. annual SEPP's are $50k but you start in July; you can take just $25K in year 1 and bump up to $50k starting in year 2.

3. If you ask right (meaning language is critical) you can get annual recalculation built into the use of the amortization and the annuity methods. I now have a number of PLR's that permit it & several that do not. It is apparent that the key word not to use is "modify" whereas "(re)calculate" seems to be okay. By annual recalculation, I do mean using updated IRA balances, an updated or fixed interest rate and an updated (reduced) life factor or annuity factor. However, methodology changes, e.g. jumping from the minimum to the amortization method are not allowed.

4. Virtually any permutation of account fracturing or aggregation is permitted as long as it all happens before SEPP's start.

5. Commencement of multiple SEPP's streams using different accounts & different methods with different commencement dates are okay.

6. Fixed (3% and 4%) as well as variable COLA's based on some relative index factor are all okay.

7. When recalculation is needed under any of the three methods; just about any valuation or measurement date is fine.

8. When accounts are aggregated to set the SEPP amount; the actual withdrawal can come, in whole or part, from any of one the accounts in the original aggregation.

(More later)

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