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petitioner retained EMJAY Corp. (EMJAY), an actuary, to calculate
the needed series of substantially equal periodic payments from his
IRA (pursuant to section 72(t)(2)(A)(iv)) to avoid the imposition
of the 10-percent tax on premature distributions under section
72(t)(1). In a December 5, 1989, letter, an executive vice
president of EMJAY advised petitioner of the different calculation
methods petitioner could employ.1 Petitioner elected the
calculation method that allowed him to receive annual distributions
of approximately $44,000.
In December 1989 when petitioner was 55 years old,2 he began
receiving annual distributions from his IRA. The distributions
from petitioner's IRA were as follows:
December 1989 $44,000
January 1990 44,000
January 1991 44,000
January 1992 44,000
January 1993 44,000
November 1993 6,776
Petitioner received the $6,776 distribution in November 1993 to
compensate for the lack of payment by Sowhite Chemical after it
filed for bankruptcy. In November 1993, petitioner was over the
age of 59-1/2.
1 The three permissible methods for calculating the
series of substantially equal periodic payments under sec.
72(t)(2)(A)(iv) are provided in Notice 89-25, Q&A-12, 1989-1 C.B.
662, 666. The parties agree that the method selected by
petitioner satisfies the requirements of Notice 89-25.
2 Petitioner was born on Mar. 3, 1934.
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