One question that just arose under IRC 404(a)(8)© is whether you would want to proceed with a 412i plan for a sole proprietor which would be partially funded with insurance policies, since under 404 the premiums are not deductible? Am I all wet, or is an underlying condition of 412i that the plan sponsor be incorporated in some fashion?
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Actually, answered my own question (I think) in that IRC 404 is explicitly talking about true cost of insurance (ie PS-58) rather than actual premium paid, which is same case regardless. Of course, the current taxation of PS-58 is undersold in the presentations I've seen WRT 412i plans.