Substantially equal periodic payments from an IRA.(individual retirement accounts)

Publication: Journal of Accountancy

Publication Date: 01-OCT-08

Bookmark this article Print this article Link to this article Email this article Digg It! Add to del.icio.us RSS

COPYRIGHT 2008 American Institute of CPA's

In the current economic climate, unexpected circumstances may cause many individuals to consider the early withdrawal of IRA funds. Minimizing the tax consequences of these withdrawals requires careful consideration of opportunities to avoid the 10% penalty on premature distributions.

While all distributions from a traditional IRA are subject to income tax under the annuity rules in IRC [section] 72, an additional 10% penalty is imposed by section 72(t) on the taxable portion of distributions occurring before the owner reaches age 59 1/2. The IRA owner can avoid this...

Read the full article for free courtesy of your local library.