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If the old loan was offset then I see no problem; it simply doesn't exist (except for the 12 month lookback on the max amount). As far as credit worthiness, I don't want to be the one denying a loan or advising a client to deny a loan for that reason, unless there is some blatant thing to point to like taking a loan 2 months ago and not making any payments. Not that this should matter, but it does: I don't think anybody (IRS) cares as long as you follow the rest of the rules on issuing and defaulting on loans. IMO the reason for having a limit on the number of loans is to create a bright line so that serial defaulters can be denied for something other than subjective creditworthiness.

If an allocated amount is enough to qualify for the "active participant" box on the W-2 (which affects the taxpayer's IRA deductibility) then why shouldn't it be good enough to count for 404 purposes?

What does the plan document say? I have seen pre-approved documents with a checkbox option to limit the beneficiary to the participant's spouse. I don't know that I've ever seen that option used, but strictly speaking a DB plan isn't required to offer any forms of benefit other than what's required under the QJSA rules, and QJSA means spouse.

Griswold, are you asking whether they should amend their prior unnecessary filings by filing multiple 5500's for each year for each separate benefit because they didn't have a wrap plan? If that's what you're asking I'd want to thoroughly examine the facts to be sure that they really didn't have to file, but if they didn't have to file there's no need to amend prior unnecessary filings.

With Appreciation, "trust agreement" normally means the legal document between the employer(s) and trustee(s) creating trust. The distribution and other disbursement ledger is usually called a "trust report." Just sayin'.

austin3515, the procedures have not changed. What you described worked for my client a couple of years ago.

If it was an asset sale and the seller retained the plan, why is the buyer involved at all? For purposes of the Plan it sure sounds like you have two unrelated employers which is probably part of the reason it was an asset sale in the first place. The employees were terminated by seller and rehired by buyer. Whether buyer grants service with seller to the employees or not is up to them and the terms of buyer plan, but what seller does with Seller Plan should not be a concern of the buyer. At least as far as I understand asset sales but maybe I'm missing something.

Unfortunately, it is not. Medicare and Medicaid enrollment are specifically referenced in Treas. Reg. §1.125-4, but VA enrollment is not.

Even if her investigation has a focus about one employer, the Secretary of Labor has broad powers to examine almost anything about an ERISA-governed employee-benefit plan. With further powers, the Secretary may “require the submission of reports, books, and records, and the filing of data in support of any information required to be filed with the Secretary under [ERISA].” For example, the Labor department may require production of every record behind any entry in the whole pooled-employer plan’s Form 5500 report. ERISA § 504(a)(1), 29 U.S.C. § 1134(a)(1) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1134&num=0&edition=prelim. And that power applies even if the Labor department has no reason to suspect even a potential ERISA violation. Compare § 504(a)(1) with § 504(a)(2).

My understanding is the pro-rata rule is applied on 12/31 of the year of conversion. In this case only a small portion of the conversion is likely to be tax free. A way around would be to roll the qualified plan money back into a qualified plan before 12/31/2023 to zero out his pre-tax IRA balance. But I'm not a CPA so you might want to discuss this with one as my understanding is simply free advice which is often worth what you pay for it.

I am not aware of an explicit rule that says so. A few thoughts: Does the plan or loan policy explicitly address this situation? If yes, follow the plan/loan policy. Generally, it is not good loan policy to allow a new loan if an existing loan is in default because: A defaulted loan is an outstanding loan. It continues to accrue interest. If the plan or plan's loan policy only permits one loan at a time, the defaulted loan is that one loan. The Plan Administrator should know about the defaulted loan and likely should not authorize a new loan because the participant is not credit worthy. If the plan or loan policy requires that loans must be repaid by payroll deduction, then what would argument would support taking loan repayments for a new loan and not taking loan repayments for the defaulted loan? If the participant is an HCE, there is a possibility that the defaulted loan is a prohibited transaction. If the additional loan is permissible, then the defaulted loan is taken into account when determining the amount available. If the loan is offset after a distributable event, then that loan is no longer considered an outstanding loan. Depending upon the circumstances, this may not get the PA off the hook for authorizing the loan.

The employer contribution limit for a calendar year plan for 2023 for each individual is the lesser of: A) 100% of Compensation, or B) $66,000. The overall deduction limit for employer contributions is 25% of Compensation (exclude Compensation over $330,000 in 2023). Compensation is defined in your plan document, but if the business is taxed as a sole proprietorship, then the term Compensation is the net earned income from self-employment (NESE), which is a simple circular calculation. For example, if your spouse is self-employed and has $1,000 on line 31 of her Form 1040 Schedule C, then you subtract 1/2 of the 164(f) deduction (normally that would be a subtraction of $1,000 x .9235 x .0765), then you subtract your spouse’s employer contribution to the plan to get your spouse’s NESE. That NESE is the limit under section 415 for the total allocation your spouse can have under the plan, excluding any catchup deferrals. 401(k) salary deferrals, other than catch-ups, are also included as counting toward that limit. Keep in mind, deferrals can only be withheld from Compensation, so if your spouse only has $1,000 of income, then the 401(k) deferral and any catchup deferral for you spouse has to limited to fit under the Compensation limit. Just a reminder: once you have the NESE you yourself and your spouse, to multiply that by 25% since that gives you the maximum deductible contribution that the company can contribute for the year.

Yes, it is that time of year again – the annual tax lament, to the tune of “Yesterday” by the Beatles. Remember, it is only when the final line is truly sung from the heart that one can appreciate the scope of anguish and angst that the artist is attempting to convey… Yesterday... Income tax was due, I had to pay... All the funds I tried to hide away... I don't believe, I'll eat 'till May. Suddenly... I'm not sure that I am fiscally... Ready for responsibility... Oh yesterday, came suddenly. Why, I Owed so much, I don't know, I couldn't say May be Forms were wrong, how I long, for yesterday. Yesterday... Seemed like prison time was on its way... Now I need a place to hide away... While keeping IRS at bay. Why, I Owed so much, I don't know, I couldn't say May be Forms were wrong, how I long, for yesterday. Yesterday... Taxes due, I filed come what may... Losing all deductions that's my way... Of giving IRS my pay. mm - mm - mm - mm - mm - mm - mm.