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I had all my clients retain a real estate agent (someone reputable and not family related) and provide a formal appraisal, nothing like "well, I think it is worth so and so". It was all provided on official letterhead, FWIW. Sometimes nothing is good enough but this was better than nothing. When clients provided their own estimates, I did not accept it. They grumbled about the fees for an appraisal but at the end of the day, they understood that upon an audit, a formal appraisal was much more acceptable so they did it. The moral of the story, do not have RE in the plan (together with life insurance 😀)

If they amend to retroactively adopt the 4% safe harbor nonelective, then there is no ADP test, and therefore no refund and thus no late refund penalty.

You don't say how big (assets/participants) the plan is - at nearly $3M for just the RE component, maybe this is owner only or owner and spouse only, or maybe this is a smaller portion of a larger plan? If any non-owner participants then you have fiduciary prudent investment concerns. If owner-only, then likely very near 415 max and I'd be concerned about over funding. Agree with this wholeheartedly.

As a person who have dealt with RE in DB plans, always refer to an ERISA attorney as there are so many things that can go wrong especially when it comes to expenses. Also, spending 1.5M does not necessarily increase the property value by 1.5M so could generate a loss (or a tremendous return). I am assuming you are not worried about overfunding/losses as the total expenses between purchasing and renovations add close to 2.9M. Also, what will happen to the RE once the plan is closed (RE belongs to the plan and not to individual)? The plan sponsor may not necessarily purchase for their own use (attorney question) Just my 2 cents (and a few additional unsolicited cents) based on experience.

Depends on whether you’re reporting on a cash or accrual basis.

Also just used to pull a listing of all plans effective post 12/31/2022 so that we don't file extensions for them!