Dougsbpc Posted January 5, 2018 Share Posted January 5, 2018 We administer an 18 participant DB plan covered by PBGC. We are going through a standard termination and the company will fund any difference between assets and liabilities. Participants will likely be paid benefits in late March 2018. Exactly at that time a contribution will be funded. Given the plan termination, are there any restrictions on what year the deduction for the contribution can be taken? Must it be 2018 or could it be 2017 (assuming they went on extension) Thanks. Link to comment Share on other sites More sharing options...
Effen Posted January 5, 2018 Share Posted January 5, 2018 Either year is acceptable. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice. Link to comment Share on other sites More sharing options...
Buffys Redrum Posted January 5, 2018 Share Posted January 5, 2018 Is the accounting cash or accrual? An accrual basis allows either '17 or '18. Cash basis may require 2018 (the year of deposit). The accountant may have the final say. Link to comment Share on other sites More sharing options...
Mike Preston Posted January 5, 2018 Share Posted January 5, 2018 There is no such thing as "cash" accounting for purposes of dealing with contributions. Absolutely none. The deduction can be taken in either year, subject to the following: 1) The plan termination date is in 2018 2) The amount considered and deducted in 2017 when added to what already has been considered and deducted for 2017 doesn't exceed the deductible limit under 404 for 2017. 3) If the plan termination date is in 2017 then there are some at the IRS who say that carte blanche exists with respect to 2017 deductions but 2018 deductions could be substantially impaired. John Feldt ERPA CPC QPA 1 Link to comment Share on other sites More sharing options...
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