Leaderboard

Absolutely. Given the 9/15 drop dead date, we work backwards from there given the situation (solo plan, few employees, larger plan) for the time needed to complete the valuation, establish the trust/custodial account, execute plan documents, draft and review plan documents and come up with our approximate due date for the client to engage us for a prior year effective date. Don't want a sales rep selling a 2023 plan on 9/13/2024!

You follow the plan terms but you need to test the total allocation for the year.

It sounds like you answered your own question. If there are other assets available (with Nationwide) to cover the RMD, then take the RMD from there. That leaves the remainder of the year to rollover the LP. Once the LP is in an IRA, he can use funds in any of the other IRAs (assuming he has some other IRAs) to cover the RMD due based on the collective balances in all of his IRAs (including the one with the LP). This could be motivation to make the move.

The above word "allows" might imply some discretion. The document probably does not include discretion but check carefully.

I believe this would fall under the newly expanded self-correction procedures for operational failures corrected within 2 year. I believe the fix would be to make the missed contributions along with earnings. But you can check the latest EPCRS IRS notice.

Sure, but a plan set up as late as October 15 will have some sort of a problem, since the minimum funding was due September 15.

Section 315 of SECURE 2.0 addressed two issues related to family attribution. The first was to disregard state community property laws when determining ownership for plan purposes. The second was to modify the rules for attribution between parent and minor child where each parent owns a business that is separate and unrelated to the other parent. It seems like these rules do not affect this situation. Before setting up any retirement plans for any of the businesses, seek competent advice and counsel. Dad's and Second Son's businesses already appear to be related entities.

Well the DB plan has a minimum required contribution which may be larger that the Schedule C net income. In that case your income for the year is $0 (probably) and you may have a nondeductible required contribution to the Plan. Depending on when it's deposited you might be able to kick the can into next year by designating different years for MRC and deduction.

2024 is a distribution calendar year. He will have to take his RMD before he can do a rollover. Sounds like the accountant was thinking ahead on this one! Now when the IRS disqualifies the plan, it will only be the one dentist who gets hit with it.