IRA owner dies with no named beneficiary; proceeds are to go to estate. The owner was married and the spouse is the sole estate beneficiary.

Does anyone know of any PLRs or other guidance that would allow the spouse to be treated as the beneficiary; effectively looking through the estate to the ultimate beneficiary of the proceeds?

(I already told them to double/triple check for papers and/or a default beneficiary.)

I have a person who entered the CB plan but not the PS plan for 2010. they got an CB allocation. Term w/ 1000 hours

Do I

1) leave them out of the gateway calculation

2) give them more CB allocation to get them up to gateway (i'm averaging db gateways %, so it doesn't seem like that would work)

3) force their entry into the PS plan to get them to the gateway.

my initial thought is that they do not qualify for the gateway, since they did not get an "employer contribution"

DB plan is terminating and preparing to distribute assets. I understand that a participant's RMD is not eligible for Rollover, but is the RMD required to be paid prior to the final distribution of assets?? And does the participant's employment status (actively employed or terminated) come into play in the answer?? Thanks.

I know this topic has been discussed over and over, but I'm not finding my exact answer. The plan is cross tested, so to pass gateway and general test, the Self Employed owner can receive a contribution that exceeds 25% of his Net Earnings from Self Employment. The total contribution to the plan is less than 25% of compensation when considering compensation for the SE owner and 2 other employees/participants. Is the Self Employed owner limited to a 404 deduction of just 25% of his Net Self employed income (this would be the same as 20% of his Schedule C minus 1/2 SE tax but not his contribution)?

Thank you.

a one participant plan has to prepare fas 158 reporting (they have government contract work and the government is requiring this).

The participant is expected to take lump sum in 5 yrs (NRA).

I looked at the monthly spot rate yield curve for high quality corp bond rates and determined that as of 12/31/2010 the yiled with a 5 yr maturity is about 3%.

Would this make sense as an appropriate discount rate for the 2010 net periodic pension cost calculation?

thanks

small SH plan using basic match formula calculated on an annual basis

calendar year plan

sponsor entity is professional corporation

sponsor wants to terminate plan due to retirement at the end of the plan year, but wants to have everyone paid out by 12/31/11 so that final 5500 can be filed for 2011. He wants to have plan termination effective 10/31/11 so that participants can begin their benefit payouts in time to have everyone paid by 12/31/11.

After reading 1.401(k)-3(e)(4) I am confused...

Here is what I understand needs to happen for the termination to be effective 10/31/11:

1) Notice must be given to all participants (all three of them) 30 days in advance of the amendment to terminate the plan and hence terminate the SH match contribution.

2) Plan amendment needed to require ADP/ACP testing using current year method

3) Top Heavy allocations must be provided for the termination year.

The amendment to terminate the plan on 10/31/11 does not result in a short plan year for 12/31/11...right? Or...does it? What compensation do we use for calculations??

Wouldn't it be so much easier to terminate the plan as of 12/31/11? No ADP/ACP...no Top Heavy allocations...just the notice letting the participants know that the plan is terminating effective 12/31/11, therefore no SH contributions for 2012.

Am I missing anything here?

Please advise...

Thanks

When is the deadline for "contributing" to the 401(k) elective deferral for owners for corporation (C or S), partners, and sole-proprietorship?

Is it 12/31 (calendar plan year) or due date of employer tax return?

Thanks for all responses.

A DB Plan has over 1M in unfunded vested benefits (funded %=77%) as of 1/1/2011 and the variable premium applies.

Active Plan Participation is as follows:

1/1/2009 50

1/1/2010 30

1/1/2011 30

PBGC Form 10 was filed in 2010 for the active participation in 2009. Since active participation 1/1/2011 is less 75% of active participation as of 1/1/2009, must Form 10 be filed for 2010?

Calendar year plan has 1 hour wait for eligibility (entry on the next 1/1 or 7/1). Profit Sharing only requires that a participant is employed on the last day of the year.

I get a payroll report from the client and there are several employees with a very small number of hours during the year. For example, date of hire 4/15/2009 and total hours = 16. Another has DOH = 2/3/2010 and total hours = 8.17. No date of termination for either.

The office manager says that these people are like independent contractors, and just work when they are needed, and that they shouldn't be eligible for the plan. Since they're W-2 employees, I don't think independent contractor really fits. Probably something more like temp workers.

There is no termination date in the payroll records, so from my reading, they should enter the plan and get a profit sharing contribution. That would get them something like a $5 profit sharing contribution.

Even though there's no official term date, could it be argued that they are really terminated after they work their hours and are rehired the next time they work so that they are not included?

Does anyone know of a way to get a copy of this information without paying $850?

I'm reviewing an ADP test for a fiscal year plan and have concerns about the amount of deferrals counted in the ADP test and for 402(g).

3/1 - 2/28 plan year.

Owner age 50+, compensation well over $245,000.

$22,000 of deferrals from bonus in July 2009, no other deferrals for calendar year 2009.

$22,000 of deferrals from bonus in July 2010, no other deferrals for calendar year 2010.

ADP test failed at 2/28/2010 and owner had $1,600 re-classified as catch-up.

The valuation system is showing $3,900 of catch-ups for plan year ending 2/28/2011 and counting $18,100 of deferrals in the ADP test. The system also shows the participant did not exceed 402(g).

I agree with the system's catch-up determination. It's the other two pieces that don't look consistent. If the participant did not exceed 402(g) for 2010, then any deferrals in excess of $16,500 are catch-up and are not included in the ADP test. If you take the approach that he used up $1,600 of his catch-up limit before making his deferral in July 2010, his maximum allowable deferrals would be $16,500 + the remaining $3,900 of catch-up for a total of $20,400. So, the $22,000 deferral would have exceeded 402(g). I don't see how you can count part of his July 2010 deferrals as the 2/28/2010 ADP triggered catch-up when determining 402(g), but not when you do the 2/28/2011 ADP test.

Any opinions on how much of the deferrals count in the ADP test and whether or not he exceeded 402(g) for 2010?

Here is a prior discussion on fiscal year catch-ups where Mike Preston mentions a difference of opinon on how to treat the ADP triggered catch-up in this situation.

http://benefitslink.com/boards/index.php?showtopic=38597

An owner of a company has his plan assets in a self-directed brokerage account. The other plan participants' accounts are at a platform. (Let us assume the other participants were given the option of opening their own SDBA and chose not to.)

The brokerage firm will allow the expenses that are due for the qualified plan account to be charged to the owner's personal brokerage account. He will then pay the expenses out-of-pocket and get a tax deduction.

Is there anything wrong with this? The plan is not paying the expenses.

Thank you.

Kate Smith

Having a minor brain cloud this morning. For calendar year tax payor do I have the timing of deductible employer contributins correct -

Corp (regular c or sub-S) 3/15 - extended 9/15

Partnership (or LLP) 4/15 - extended 10/15 but must fund by 9/15 (I think that chnged 2 or 3 years ago if memory serves)

Sole Proprietor (or single member LLC taxed as sole prop) 4/15 - extended 10/15 can fund by 10/15

Am I wrong on any of these dates?

Thanks

An accountant asked me this question:

Small business owner has had life insurance in a profit sharing plan for 15 or so years. No one ever reported PS-58 costs to the accountant and they were never picked up as income. What are the tax ramifications if the plan is terminated? They probably want to cash in the policy (they don't need the insurance) and roll over the account balance.

DB plan is terminating and preparing to distribute assets. I understand that a participant's RMD is not eligible for Rollover, but is the RMD required to be paid prior to the final distribution of assets?? And does the participant's employment status (actively employed or terminated) come into play in the answer?? Thanks.

If a client wants to amend the entry dates from semi-annual to quaterly, effective 4/1/2011, must the amendment be adopted prior to April 1st?

I noticed another bogus post by SparkLeo (it's gone now, probably wisely deleted by Dave), and I got to wondering why it made some sense and no sense at the same time, and through a search, found an identical thread from 2000, below. S/he just added a question mark to the topic title. I guess there was probably an embedded link or something in there, but really, can anyone tell me what this is all about? Do these losers somehow get paid for this? Just wondering.

post May 31 2000, 01:45 PM

At a recent conference on the changes to the 5500 form for 1999, it was mentioned that the DOL will now require plans to file the complete SAR along with the 5500 series. Does anyone know if this is true?

If you amend a plan to exclude HCE's from receiving Davis Bacon/Prevailing Wage contributions, is there any limitation in amending the plan back to include the HCE's in the DB/PW contributions again or vice versa? In other words, can you turn it on and off like a light switch at will via amendment to include/exclude HCE's from DB/PW contributions?

Given a combined DB/DC with safe harbor 401(k) contribution (3%)

Question: Are you required to provide the 3% SH contribution to the NHCE even though the HCE did not contribute to the elective deferral?

A 401k client recently received a $1,818.33 "refund" check from the IRS. Their note just says F-5500 REF. Neither the client nor I have any idea what this is about. Has anyone else seen something similar?