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I wonder if they aren't trying to make the now obsolete point that if one doesn't wish to contribute and is able to elect a $0 allocation, then the Plan allocations are all impermissible CODA's. Aside from a deferral election and resultant safe harbor if any, and top heavy if to all employees, any discretionary allocation needs to be the election of the Employer. Doesn't matter if its a partnership, sole-prop, LLC, or fully incorporated entity, it has to read as an entity decision which a resolution helps codify.

If it is allowed by the plan, then it is allowed. If asset values have decreased since the latest val (generally end of prior year) then you can do a special val (or if assets have increased and the trustees find it prudent for the participant to share in the gains). Otherwise you just pay the person out and they get no gains or losses for the year. If you haven't done the 12/31 val yet then I would wait until that is done. People need to understand that it's not a bank where you walk in and get your money right away (or not, as in the case of SVB, but I digress).

Agreed, the deemed CODA guidance which would apply to partners in a partnership is a facts and circumstance test for employees. This facts and circumstance is based on the participant's capacity to elect a contribution or not year by year. However, a one-time irrevocable election would not be a deemed CODA.

Curious how the participant cancelled the policy (unless done thru sponsor/trustee), unless he/she is the owner/trustee. Policy is supposed to be owned by the plan and an asset of the plan. If the policy is cancelled aka surrendered, cash value is an assets of the plan and cannot simply be distributed. what am I missing here?

If no HCEs benefit in the plan, then the plan automatically satisfies 401(a)(4), including the gateway.

Precisely, just went through all this with a colleague yesterday. Solo or HCE-only plans - no reason not to allow this. But any NHCEs - fugediboutit!

If one subscribes to Wolters Kluwer VitalLaw™ research databases, its edited Internal Revenue Code integrates Public Law 117-328 deletions and additions (as Belgarath wishes for) with caution markers for each subpart’s applicability date. One imagines Bloomberg and other publishers have edited their versions. Belgarath is right; it’s helpful to read the changed Internal Revenue Code as a whole text.

Names can be deceiving. If this is truly a dynasty trust than it is irrevocable and attribution is according to actuarial value of beneficial interests. In other words, if D is 50% beneficiary she is deemed to own 37.04%*50% of company. If it is a revocable grantor trust that becomes irrevocable on a later date (e.g. grantor's death), grantor (assumed as D's father) is constructive owner and his ownership is attributed to D. If revocable but non-grantor than attribution same as if irrevocable. First level cut. There may be re-attribution among family members depending on other facts.

For this, one needs a subscription with one of the commercial law publishers. For example, Bloomberg’s Bloomberg Law, Reed Elsevier’s Lexis, ThomsonReuers’ Westlaw, or Wolters Kluwer’s VitalLaw.

Assuming that owners name is the beneficial owner of dynasty trust/owners name then I believe that owners name is considered to own 37.04% of the company. For HCE determination, attribution under §318 a child (both minor and adult) are deemed to own the stock of their parent. Thus by attribution the daughter is deemed to also own 37.04%. The results would be different for §1563 and Controlled Group determinations.