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Author: joew3 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: SEPP Valuation Date: 11/17/1998 9:53 PM
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I have only recently started reading this Board and a few others here in Fooldom. I plan on using Foolish investing methods in my post retirement IRA and have a question which may be more accounting than investing but...

What point in time does one use for valuing an IRA acct when starting Substantially Equal Periodic Payments?
The 1st of the month the withdraws start?

Note: I must use the SEPP method to avoid penalties, retired under 55.

Thanks for any guidance.
JoeW3
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Author: ZBar Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6655 of 76418
Subject: Re: SEPP Valuation Date: 11/18/1998 8:13 AM
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I am using the substantially equal periodic payments with an annual distribution. I value my IRA on Dec. 31 and base the distribution on that amount. I believe I have seen IRS rulings which allow different valuation dates, but the date must remain consistent from year to year.

If you are doing monthly distributions you could base them on a Dec 31 valuation date for 12 months then recalc for the following year using the next year's dec 31 valuation.

Pixy might be able to shed some more information on this.

Z-Bar

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6660 of 76418
Subject: Re: SEPP Valuation Date: 11/18/1998 4:50 PM
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Greetings, JoeW3, and welcome. You asked:

<<I have only recently started reading this Board and a few others here in Fooldom. I plan on using Foolish investing methods in my post retirement IRA and have a question which may be more accounting than investing but...

What point in time does one use for valuing an IRA acct when starting Substantially Equal Periodic Payments?
The 1st of the month the withdraws start?

Note: I must use the SEPP method to avoid penalties, retired under 55.>>


For early withdrawals, it can be any date in the year, but the resulting amount must be taken in that year. If you use the minimum withdrawal method, then for each succeeding year you must use the same date for account valuation. For example, I use today, November 18, as my valuation date for the first withdrawal under the minimum distribution method. Whatever the amount is, I must take it by December 31, 1998. Next year I have to recalculate based on the account value as of November 18, 1999. The easiest way, though, is to use the method described in IRS Publication 590, which uses Dec 31 of the year before the withdrawal starts. That way there's never any question and it's easy to substantiate the calculation.

Regards….Pixy


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