Premature Distributions definition
Premature Distributions. If you are under age 59 1/2 and receive a nonqualified distribution from your ▇▇▇▇ ▇▇▇, a 10% additional income tax will apply to the taxable portion (generally the earnings portion) of the distribution unless the distribution is received due to death; disability; a qualifying rollover distribution; the timely withdrawal of the principal amount of an excess; substantially equal periodic payments; certain medical expenses; health insurance premiums paid by certain unemployed individuals; qualified higher education expenses; or qualified first time homebuyer expenses.
Premature Distributions. If you are under age 59 ½ and receive a dis- tribution from your IRA account, a 10% additional income tax will apply to the taxable portion of the distribution unless the distribution is received due to death; disability; a series of substantially equal periodic payments at least annually over your life expectancy or the joint life expectancy of you and your designated beneficiary; medical expenses in excess of 7.5% of Age 70 ½ Required Minimum Distributions—You are required to begin receiving minimum distributions from your IRA by your required beginning date (the April 1 of the year following the year you attain age 70 ½). The year you attain age 70 ½ is referred to as your “first distribution calendar year”. Your minimum distribution for each year beginning with the calendar year you attain the age of 70 ½ is generally based upon the value of your account at the end of the prior year divided by the factor for your age de- rived from the Uniform Lifetime Distribution Period Table regardless of who or what entity is your named beneficiary. This uniform table assumes you have a designated beneficiary exactly 10 years younger than you. However, if your spouse is your sole beneficiary and is more than 10 years younger than you, your required minimum distribution for each year is based upon the joint life expectancies of you and your spouse. The account balance that is used to determine each year’s required minimum amount is the fair market value of each IRA you own as of the prior December 31st, adjusted for outstanding rollovers (or transfers) as of such prior December 31st and recharacterizations that relate to a conversion or failed conversion made in the prior year. Reporting the Required Minimum Distribution—Beginning for mini- mum distributions that are required for calendar 2003, the Custodian must provide a statement to each IRA owner who is subject to required minimum distributions that contains either the amount of the minimum or an offer by the Custodian to perform the calculation if requested by the IRA owner. The statement must inform the IRA owner that required minimum distribu- tions apply and the date by which such amount must be distributed. The statement must further inform the IRA owner that beginning in 2004, the Custodian must report to the IRS that the IRA owner is required to receive a minimum for the calendar year. Death Distributions—If you die before your required beginning date and you have a designated beneficiary, the balance in ...
Examples of Premature Distributions in a sentence
Premature Distributions - A ▇▇▇▇ ▇▇▇ is intended as a savings plan to accumulate funds for retirement.
There is a 10% additional income tax assessed against premature distributions to the extent such distributions are includible in income (See "Premature Distributions" above).