Question that arises has the following facts:

Person age 57 sets up a Qualified Plan Rollover IRA for $200,000 during 1999. Wants to takes substantially equal payments from the IRA, calculates the amount, using an IRS approved method, based on the 12/31/99 balance and receives an annual distribution. In February of 2000, the individual rolls an additional $180,000 into the IRA, which represented the balance of his qualified plan money.

The question is as follows:

Do the substantially equal payments have to be recalculated for 2001?

May the substantially equal payments have to be recalculated for 2001?

I believe I know the answer to each question, but would like to see if I am correct. Any help would be appreciated. Thanks.

They should NOT be recalculated.

I make it very clear to clients that once we start the program, no additional money should go into (or out of, obviously) this IRA. I HATE these questions, and try to avoid them!



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Barry Picker, CPA/PFS, CFP
New York, NY
www.BPickerCPA.com

Thanks for your answer, Barry, it is the same one I had. My only other thought was to have this person transfer the additional $180,000 to a new IRA, so as to keep the original money (and its payment stream) separate.