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Welfare plan deductions, taxation


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I submit my post to this board because the H&W board doesn't appear too active.

Say a husband and wife own a company and implement a welfare benefit plan.

The actuarial level reserve to pre fund their post retirement medical benefit of 100k each is 15k each for a total of 30k.

Say they contribute and deduct 20k and the plan earns 4k in investment income leaving 24k in plan at year-end.

Since the 24k is less than the 419 deduction limit of 30k does that mean none of the income is subject to taxation?

Or is the 4k income subject to taxation?


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Is there a VEBA or what else ?

If there is a VEBA, Why ? There only 2 people and they are the owners of the company. What type of corporate entity ?


I just saw that vebaguru had given you a response on the other Forum. You probably got no further responses because there probably was nothing that anyone else wanted to add. It might not have been the answer you wanted, but that's the way the coookie crumbles sometimes.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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