Common use of Substantially Equal Payments Clause in Contracts

Substantially Equal Payments. If a taxpayer converts a traditional IRA to a ▇▇▇▇ ▇▇▇ where the traditional IRA was subject to the substantially equal pe- riodic payment exception, the same periodic payments must continue from the ▇▇▇▇ ▇▇▇. However, for 1998 conversions where the taxpayer is using the 4-year spread rule, the payments from the ▇▇▇▇ ▇▇▇ will be subject to the income acceleration rule. Thus, in addition to the normal 1/4 amount, the substantially equal amount is also includible in the participant’s gross income for each year until the full taxable conversion has been so included. This rule also applies to 2010 conversions subject to the 2-year income spread. Types of Plans Permitted to be Converted—Traditional regular IRAs, Rollover “conduit” IRAs, and SEP IRAs may be converted to a ▇▇▇▇ ▇▇▇, so long as the taxpayer meets the eligibility requirements until 2010 when the conversion eligibility rules are eliminated. A SIMPLE IRA may also be

Substantially Equal Payments. If a taxpayer converts a traditional IRA ▇▇▇ to a ▇▇▇▇ ▇▇▇ where the traditional IRA ▇▇▇ was subject to the substantially equal pe- riodic payment exception, the same periodic payments must continue from the ▇▇▇▇ ▇▇▇. However, for 1998 conversions where the taxpayer is using the 4-year spread rule, the payments from the ▇▇▇▇ ▇▇▇ will be subject to the income acceleration rule. Thus, in addition to the normal 1/4 amount, the substantially equal amount is also includible in the participant’s gross income for each year until the full taxable conversion has been so included. This rule also applies to 2010 conversions subject to the 2-year income spread. Types of Plans Permitted to be Converted—Traditional regular IRAs, Rollover “conduit” IRAs, and SEP IRAs may be converted to a ▇▇▇▇ ▇▇▇, so long as the taxpayer meets the eligibility requirements until 2010 when the conversion eligibility rules are eliminated. A SIMPLE IRA ▇▇▇ may also be