FINC322 Lecture 18: Distributions
Document Summary
Distribution rules, alternatives and taxation: premature distributions, election of distribution options, required minimum distributions, beneficiary considerations/stretch iras, qualified domestic relations order (qdro, taxation of distributions. Premature distributions: penalties, exceptions to penalties, substantially equal payments. Avoid penalty tax, if: to pay health insurance premiums when collecting unemployment, first home for participant, spouse or any child, grandchild limit ,000 per ira, payment for higher education for taxpayer, spouse or child or grandchild. Exceptions to penalties: death, disability, substantially equal periodic payments, early retirement between ages 55 and 59 1/2. Does not apply to iras: qualified domestic relations order (qdro, qualified medical expenses, educational expenses and first-time home buying expenses. 4/25/2017 expenses: esop plan distributions, return of excess contributions for the same year, irs seizure. Annuity method: payments must be made at least annually and the amounts cannot change before the later of age 59 or 5 years. 10% penalty plus interest on all withdrawals if they change.
