Brian Gallagher Posted April 3, 2003 Posted April 3, 2003 Where in the regs does it say that pre 87 distributions from after tax can be taken from principle first and then from the earnings, whereas post 86 has to be taken pro rata between principle and earnings? Remember: two wrongs don't make a right, but three rights make a left.
Guest Harry O Posted April 4, 2003 Posted April 4, 2003 There are no regulations. It is in the Internal Revenue Code (Section 72(e))and Notice 87-10 (or 87-13 -- I'm at home and don't have my files in front of me!). Your plan document also has to have the right language . . .
QDROphile Posted April 4, 2003 Posted April 4, 2003 Not many plan documents have adequate language to create the sparate accounts.
MGB Posted April 4, 2003 Posted April 4, 2003 It is 87-13, Q&A 13. Note that the distribution must be greater than the pre-86 basis in order to do this (you can't take a partial). Also, QDROphile is correct that the plan must have segregated that account balance at the time in order to preserve this feature.
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