Contessa's creative Chapter 11 plan permitted qualified creditors to stipulate their claim amounts in exchange for early distributions
in December 2011.
In addition to obtaining home equity loans, families with special needs children often take early distributions
from their retirement plans, IRAs, and annuities to finance their medical expenses.
Although they can withdraw funds from their IRAs, include the distribution in income, and then claim a charitable deduction, younger taxpayers (under age 59Vi) who may have substantial IRA balances have a further disincentive to contribute any of the IRAs to charity because of the 10% penalty on early distributions
Hurricane Katrina-related considerations - Legislation created to help those impacted by Hurricane Katrina eliminated the requirement for qualified disaster victims to pay 10 percent additional tax for taking early distributions
from their retirement accounts.
In fact, before the QDRO provisions were enacted, there were cases in which qualified plans were amended to allow early distributions
that could be rolled into separate IRAs and divided tax free (Private Letter Ruling 8336085).
VEBAs have no penalties for early distributions
, and life benefits can pass to the employee's family free of income, estate and gift taxes.
conditioned upon employer consent might be permissible, if consent was not a "rubber stamp.
Previously, participants could receive early distributions
by surrendering a small share (10 percent) of their benefits.
22, 2004, provides penalties for certain early distributions
and delayed payouts.
In 1982 Congress altered the way in which early distributions
from annuity contracts were taxed so that such distributions were first taxed as ordinary income and, in some cases, a penalty was imposed.
The tax law imposes a 10% penalty on early distributions
from retirement plans, individual retirement arrangements (IRAs), and annuities.
The Tax Court ruled that paying higher education expenses from an IRA was not a modification of a taxpayer's annuity payments from the IRA that would have made the payments subject to the 10% additional tax on early distributions