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Maintaining another qualified plan?


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Client would like to establish a SEP for 2001, but......

Client had a calendar year DB plan that was terminated in 2000. There was a contribution due for 2000 that was not put into the plan until after September 15, 2001. That contribution is being taken as a deduction on the client's 2001 personal return.

The instructions to Form 5305-SEP say you may not use the 5305-SEP if you currently maintain any other qualified retirement plan.

Is the above client considered to be 'maintaining'

a qualified plan for 2001 and therefore unable to set up the SEP?

Thanks in advance.

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For a DB plan it includes a plan that was maintained or is still being maintained. You need to use a prototype document until the SEP documents have been amended . I think this DB rule will be removed from the form, given that the combined limit, i.e. 415(e) has been repealed.

Life and Death Planning for Retirement Benefits by Natalie B. Choate
https://www.ataxplan.com/life-and-death-planning-for-retirement-benefits/

www.DeniseAppleby.com

 

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