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Thats Read The F...abulous Document

This is not official, but for the purpose of this conversation: Industry groups have reached out to IRS regarding the e-filing issue looking for a a resolution like "you can file on paper until...". It has been pointed out that website already has language to accommodate exceptions. The IRS is well aware of the issue and the number of providers who can provide e-filing services. If you rely on this and file on paper, save everything just in case. Someone recently told me that there is probably little risk here even if they reject your paper filing since you paid the penalty on time. You can also extend the due date of the filing. Several of the big software providers have said that they are very unlikely to be able to get IRS approval by 7/31/24.

Is buying out the former spouse “[c]osts directly related to the purchase of a principal residence for the [participant]”? 26 C.F.R. § 1.401(k)-1(d)(3)(ii)(B)(2) https://www.ecfr.gov/current/title-26/part-1/section-1.401(k)-1#p-1.401(k)-1(d)(3)(ii)(B)(2). Is buying out the former spouse “necessary to prevent the eviction of the [participant] from the [participant’s] principal residence”? Is buying out the former spouse “necessary to prevent . . . foreclosure on the mortgage on [the participant’s principal] residence”? 26 C.F.R. § 1.401(k)-1(d)(3)(ii)(B)(4) https://www.ecfr.gov/current/title-26/part-1/section-1.401(k)-1#p-1.401(k)-1(d)(3)(ii)(B)(4).

What Bill Presson said. Unless the trustee is ready to: resign or recuse, spend the time and lawyers’ fees to get an individual prohibited-transaction exemption, spend the fees for independent fiduciaries to make all decisions (which might include that the real property is not a prudent investment for the plan’s trust), spend the fees for independent appraisers—to estimate each fair-market value for the initial purchase price, each year’s valuation, and the price at which the plan may sell the property, pay the plan’s successor or separate trustee the fair-market rent the independent persons set, and meet other conditions the Labor department likely would require, isn’t this a nonstarter?

It’s a classic PT.

Tom, the issue is not the 415 limits but the combined deduction limit under IRC 404(a)(7). A substantial-owner DB plan would be exempt from PBGC coverage so the maximum deductible contribution between the two plans is limited to 31% of compensation, unless the deductible contribution on the DC plan does not exceed 6% of compensation. I am not sure how you could "re-classify" contributions as employee after-tax contribution after they were made, since those types of contributions must be designated as such at the time they are contributed to the plan. But if you can figure out how to make that work then you could stay at the 415 limit in the DC plan since those contributions do not count towards 404, while keeping your deductible contributions to no more than 6% so you can make a large deductible contribution to the DB plan. Another option would be to design a DB plan with a small contribution for the first year, such that the combined contributions between the two plans do not exceed 31% of compensation, and then increase the contributions next year. If you are close to retirement (within the next 10 years) and want to accrue the largest possible amount, this could be advantageous as it gives you another year of accrual towards your eventual 415 maximum.

RTFD

Guess it depends on what the document says...

Make a profit sharing contribution that passes the a4 tests.

Yes it is possible. Generally, your employER contribution is going to drop from a max of 25% to 6%. After taking into account the max 401k deferral and the 6% max employER, the remaining money already contributed might be able to be considered an after tax contribution. If you are a sole proprietor, it's fairly easy. If you are operating a corporation and getting W-2 income, not so easy. It might be considered aggressive because in theory the money going in should be designated as what it is when it goes in.

the lowest safe harbor NRA is still 62.

Ditto on previous comments. While I've been able to help some people, I have to say this board has been a net gain for me - I've learned so much over the years. There is also great comfort in knowing that other professionals struggle with many of the same issues, and there often isn't a perfect answer/solution. And, many a time when I'm chasing my own tail, someone looking at a question with fresh eyes sees the solution instantly, and I think to myself, "You darned fool, why didn't you think of this already!" Many times I have saved a great deal of time due to the helpful comments and advice available here. It's a great resource for experienced professionals, AND for newbies.

Yep. Also, I've been known to use it as a research tool. For example, when I can't remember what reg to look for, i might get a useful prompt from someone else's comment(s).

1. I like knowing that I am not the only one experiencing some of the issues presented. 2. I have been able to help out others, and others have helped point me in the right direction. 3. Daily reminders that there are very few things in our industry that are black and white. 4. I often see things addressed here before other message boards catch up them.

In addtion to what MoJo wrote (which I cannot improve on), I have made connections here with which I've been able to continue a professional relationship outside the board itself.

Dave: It's quite simple. Reading what's posted, and selectively responding keeps me grounded with reality in the industry. We tend to get isolated in what we do specifically, exactly how we do it (especially when stuck with legacy processes and solutions that haven't been challenged in a long time), and what our problems of the day entail. Reading here, 1) I see more of what goes on in the industry - and learn from it, and often can focus my attention on how to achieve that - or avoid it, without having to go through trial and error; and 2) I see alternatives that may be available to resolve the issues I have to deal with. This place also allows me to "flex" my academic muscle and explore things that maybe have never occurred in my career, play with hypotheticals, or hypothetical extensions of real issues, and often "debate" with others who have different experiences, perceptions and approaches to the same issues. I learn. I teach. I explore. Makes me a better professional.