Leaderboard

Technically true, but it would still have to be amended for interim law and why wouldn't you just restate it?

Anything you say can and will be used against you..

Is this one business or two? If it's one, she's not treating it as one. If it is one, then why does she have an LLC taxed as a corporation but reports on a Schedule C? If it is two businesses, then the Schedule C could be an adopting employer and they could be eligible earnings.

The plan must be up to date in writing as of 12/31/2019. another issue is that assets should be paid out within 1 year of the effective date of plan termination. The plan may now be considered "ongoing" due to not timely being paid out. At minimum at this point it would be a good faith best practice to amend and restate.

Nope. If participants are under 80, you MUST file as a small plan.

The 80-120 rule is always optional. Once you are below 100 participants, you can file on SF even if you filed the full 5500 the previous year.

Then use the unreduced amount for the determination of current year contribution under the terms of the plan. Remembering to limit the 415 on the basis of aggregated comp.

And the sponsor keeps it as evidence of the attempt.

Are they requesting a cash distribution or a rollover? If they are requesting cash, then it's fine. If they are requesting a rollover, then there is the possibility that they could fail to take their RMD if they terminate before 12/31/2021. In order to avoid that possibility, they should take at least the amount that their 2021 RMD would be, if 2021 were a distribution calendar year, based on their account balance at 12/31/2020 and their current age, as a cash distribution and roll the rest over. It might help to remind the participant that if they fail to take their RMD there is a substantial excise tax that they would be responsible for. If they ultimately refuse to take enough of their distribution in cash, and it later turns out that a 2021 RMD is required, then a corrected 1099-R should be issued showing the RMD amount as a taxable distribution and only the remainder as eligible for rollover. The participant would have to be notified that $X amount of their distribution was not eligible for rollover and should be removed from their IRA.