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Allocations in Excess of 415 Limit


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Tom: I get what you are saying. I will double check to make sure nothing in the allocation section says you can't allocate beyond 415. By the way it is a Relius prototype we are using.

QDRO: I think I now get what you are saying, I may have been dim in the past.

But to make sure here are what seem to be your main points:

1) There is a way to correct (assuming nothing in the document says what Tom is saying) under self correction, but self correction by definition means limited use and you put in place procedures to avoid in future.

2) Outside of self correction you are stuck.

3) And I think this is where I was confused. The regulations are written such there ought not to be a failure because you shouldn't be allocating in excess of 415 ever. And since there shouldn't be a failure that is why you need self correction, the regs don't allow for a correction. And yes I now see what you are saying if you are past year end there is now way to not allocate 401(k) money to avoid 415 limit as it is already in the plan, so you would only fail to allocate ER money.

Let me know if you think I still don't understand you correctly.


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  • 2 months later...

Along the same line, I have a LLC (husband/wife partnership) which made only a PS contribution for 2011. Trouble is, they only had passive income for 2011. And to compound it, they rolled the whole amount into IRA's in January. How do we fix this? Excise tax apply?

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For those of you using the Relius document system - be careful when looking at the "document" terms. The boilerplate document language being referred to here was submitted to the IRS prior to the final 415 regulations. If you look at the Relius 415 amendment, you will see that it overrides the EGTRRA boilerplate language, and says, in a nutshell, to use EPCRS. This may be true for other document providers as well, I don't know.

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