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Belgarath last won the day on March 20

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  1. I'm thinking it is an adjustment to the partnership basis, and I would think it is already taken into account by the time you get to the 14a amount. Don't know if the following may help:
  2. Any updates on this? For example, since the administrative cost to "fix" something like this might exceed the cost of the error, then if the employee is amenable: 1. Just leave it in the plan, with a statement by the employee that they wish to leave it in the plan. 2. Have the employer pay the employee a little bonus, while leaving the money in the plan. Say incorrect deferrals were $200.00 - employee agrees to leave money in plan, employer pays employee a $100.00 bonus. Everyone is happy, except perhaps an auditor? 3. Etc., etc.. - since no specific pre-approved fixes, then has to be something a little creative, yet reasonable. This can't be an unknown error...
  3. There's a certain level of insanity to all of this - I'm not disagreeing with the comments, but the end result is simply bizarre. There isn't, IMHO, any need to make an employee "whole" - this is only withholding, NOT the applicable income tax. So the employee receives all of the income to which the employee is entitled, has to declare it as taxable, and pays the appropriate income tax. The employee is in the same position, ultimately, that the employee would have been had the error not occurred. Am I missing something? Now the employee gets an extra 20% bonus on the defaulted loan amount. I just don't think this specific situation was probably considered when they were creating the correction. I do agree that particularly for small amounts, just not worth messing around with it any further - pay it and be done! On larger amounts, I'd think I'd try to pursue some other alternative.
  4. Yeah, BG's comment on the 15% was what I was getting at, only he stated it better! When typing in a hurry, sometimes the thoughts don't translate to words on the page. So yes, what I was trying to say was it might be more than 3% - if HC gets more than 9%. And of course, could be up to 5% as BG says, if HC gets 15% or more. Sorry for any confusion.
  5. As you describe it, shouldn't be a problem. Since getting no allocation, former employee isn't "benefiting" and therefore doesn't have to receive gateway. One other question, since you specified that owner wants the maximum - is this maximum more than 9%? If so, then your gateway may be more than 1/3.
  6. Curious - these days there is usually a lot of talk about merging public schools or school districts to save money. How does this work for their 403(b) plans? I mean, in private employer qualified plan situations, the plans are often merged, so there is an assumption of assets and liabilities, etc. But in a public school situation, there isn't any "trust" to be merged. So does the new school or school district just set up a totally new plan, and the old plans are "terminated" - which is another headache altogether, or are the plans in fact "merged" into a new plan of the new sponsoring school or school district? Many of these plans have individual annuity contracts titled to the employee, so a new school/district can't really "force" them to do anything. If there are employer contributions subject to a vesting schedule, then it seems like this could get very messy. What would typically (if there is such a thing as typically) happen in these situations?
  7. I'm sure you've considered this, but since the universal availability requirement applies only to deferrals, it isn't necessarily that big a deal anyway. And if a governmental (public school) 403(b), you can be as discriminatory as you want to be on the employer contributions (obviously not race, religion, gender, etc...) I'm so conditioned to being paranoid about nondiscrimination in "regular" plans that I sometimes have to take a step back and reset my thinking when a governmental plan question is involved.
  8. Take a look at 1/401(k)-1(d)(3)(iv)(D). this may help you out. Essentially, a loan doesn't have to be taken first if the loan increases the need.
  9. I also missed it, but at least I have a valid excuse (not a note from my Mother) - we were in the midst of getting 30+ inches of snow. Fortunately all of the light and fluffy variety. Way better than the hurricanes that Tom has to worry about!
  10. We don't do these, so I'm not familiar with document details. But it seems to me like a "regular" 401(k) or PS document could be used for a ROBS plan, as long as the document allows essentially unlimited portion of the assets to be invested in the employer (must be a c-corp) stock. Is that true, or is a special document necessary? I know these have become more popular in recent years. Years ago, the IRS REALLY didn't like them, but it seems like for plans with no NHC, and a stock that is properly valued by an independent appraisal each year, that FILES 5500 FORMS, that they have dropped some of their previous objections. Anyone work with these?
  11. I neither agree nor disagree. There is such a universe of facts and circumstances that could affect the final outcome that I wouldn't dare to generalize. (How's that for a non-answer?)
  12. "Economic Analysis" - reminds me of a line in "Pretty Woman" where Richard Gere asks Julia Roberts what her name is. Her answer was, "What do you want it to be?" Seems like economic analysis usually has the same approach to an answer - "What do you want it to be?" This is obviously somewhat tongue in cheek, but by no means entirely in jest.
  13. I've never looked for any regs or guidance on this, but I would treat the plan, for all practical purposes, as having a plan year end as of the last day of February. If leap year, then February 29th. Other years, February 28th. Until someone convinces me otherwise. I have a hard time imagining that an IRS auditor would give you trouble on this.
  14. So how do you deal with this? According to Sal, these guaranteed payments, under some circumstances, ARE taken into account in computing net earnings from self-employment. Most calculations I've ever seen just use the K-1 Line 14 amount, minus 179, unreimbursed partnership expenses, oil & gas depletion. Because these amounts are "taken into account" - does that mean the CPA has factored them in already, if applicable, when arriving at the Line 14 number? These are often pretty large amounts.