Michael J. Kulzer & Jan K. Bielman-Kulzer - Page 8




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          or disability) within 5 years of the date of the first payment              
          or, if later, before the employee attains age 59-1/2.  In that              
          event, section 72(t)(4) provides that the exception to the 10-              
          percent additional tax set forth in section 72(t)(2)(A)(iv) does            
          not apply and the taxpayer's tax for the year of the modification           
          shall be increased by an amount which is equal to the amount                
          which would have been imposed, plus interest for the deferred               
          period.                                                                     
               In Rev. Rul. 2002-62, 2002-2 C.B. 710, the Internal Revenue            
          Service promulgated further guidance about what constitutes a               
          series of substantially equal periodic payments, within the                 
          meaning of section 72(t)(2)(A)(iv).  It states that payments will           
          be considered to be substantially equal periodic payments if they           
          are made in accordance with one of the three methods described in           
          Notice 89-25, Q&A-12:  The required minimum distribution method,            
          the fixed amortization method, or the fixed annuitization method.           
               Rev. Rul. 2002-62, sec. 202(d), 2002-2 C.B. at 711,                    
          describes how to determine the account balance used to determine            
          periodic payments, as follows:                                              
               (d) Account balance.  The account balance that is used                 
               to determine payments must be determined in a                          
               reasonable manner based on the facts and circumstances.                
               For example, for an IRA with daily valuations that made                
               its first distribution on July 15, 2003, it would be                   
               reasonable to determine the yearly account balance when                
               using the required minimum distribution method based on                
               the value of the IRA from December 31, 2002, to July                   
               15, 2003.  For subsequent years, under the required                    
               minimum distribution method, it would be reasonable to                 






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