I started a Roth some years ago with $2k. The stock was a loser and the value now is $1200.

Question- Can I take the $1200 out without penality?

I was under the impression that the monies contributed to a Roth being taxed already would available at any time. Only the monies above the contribution would have to stay in the account.

Am I wrong?

Thanks

Paul

Is it possible to have a one person C corporation medical reimbursement plan?

I have a client who is in the middle of converting self directed brokerage accounts in a 401k Plan to platform situation.

They are making a Profit Sharing contribution this year, and wanted to know if, because everyone's money is all over the place, could they just reduce the amount of funding from Profit Sharing by the amount of the refund due to each of 9 docs.

My first response to her was that such a thing is not allowed. Can someone direct me a regulation or other IRS publication to substantiate my response?

Thank you for all responses.

DB PY = 9/30/03-9/29/04

PS PY = 10/1/03-9/30/04

Sponsor's FY = 1/1/04-12/31/04

What comp limit applies? I think the 404a7 limit should be calc'd on 205000, but the benefits and contributions should be calc'd on 200000. Anyone agree? Disagree?

For determining 415 compensation, are any of the following included:

Car income

car allowance

severance

group term life insurance income

Am I correct that possibly in addition to the above and barring barring any other "unusual" forms of compensation, 415 comp is basically W-2 plus elective deferrals?

My firm has some clients who are getting advice for a local attorney about paying for their disability insurance policies. The advice doesn't pass the smell test with me but I can't find any cites to indicate it doesn't work. The advice is as follows:

A shareholder employee pays the premium on his individual disability insurance policy his self, out of personal funds. After the end of the policy year, if the shareholder did not suffer a disability, the corporation reimburses the shareholder for the premium. If the shareholder did suffer a disability the premium is not reimbursed.

If the shareholder did suffer a disability the disability benefits paid by the policy are treated as non-taxable benefits because the shareholder paid the current premium with personal funds. If no disability is suffered the reimbursement of the premium by the corporation is treated as a deductible expense of the corporation under Code Sec. 162 and is not included in the shareholders income under Code Sec. 106.

Does anyone have an opinion as to whether or not this works. It seems that the shareholder employee gets the best of both worlds. He can deduct the premiums in year when no disability in incurred, and then can treat the policy as paid for with after tax dollars when a disability is incurred, thereby causing the benefits to be non-taxable.

Thanks for your opinions.

Dean

I am eligible and do participate in both my company's 401K and 457 plans as I work for a government agency. Originally we only were eligible to participate in a 457 plan and recently we were given the option to also participate in a 401k plan also and I have participated in both plans. We are probably in a rather unique if not strange situation vis a vis the tax authorities as most people have one or the other but not both plans. My question is whether or not this participation is subject to the excess deferrals rule of the IRS. How is this treated? Any clues? Any websites I can look at? Any useful advise would be appreciated.

I am setting up an IRA to invest in real estate. I have decided on a self directed IRA custodian but I want to go one step further. I want checkbook control of my IRA.

I have been told that I can do this by setting up an LLC of which the IRA is the beneficiary and then transferring the assets to the LLC. The companies that help with this set up charge about $4,000 which seams like an aweful lot for setting up an LLC. Of course these companies state that the LLC has to be set up corecctly to avoid full distribution of the IRA - enough to scare me out of trying it myself. But there must be another altrnative - I can't believe there is some secret knowledge imparted only to these particular type of advisors. I have no problem paying a competant CPA to help me with this but am not sure if the $4,000 is a little much.

I was also told that you could also get checkbook control by setting up a trust. I appoint a trustee (unrelated party) who would write the checks as I see fit.

By doing this I accomplish 1) avoid having to go to the custodian each time I need to have a check drawn 2) avoid paying fees for them to review each request and cut a check. Another advantage is that I can place the assets where I think they will be the safest.

Thanks for any input you may have.

Val

Hi

First off - I am looking for a CPA who understands IRA law and real estate investing within an IRA. I live in New York so I thought it would be easy but I am coming up short. Are there any good directories for CPA's ?

I currently have a large sum in an IRA account that I am considering rolling over into a roth. My tax rate in 2004 was very low but am expecting to make more (self employed) income this year. I have an opportunity to invest in real estate with an expected return of 30%-40% and thought the roll over would be a good idea. I am currently 40 so have at least 20 years to invest. Are there any reliable ways to calculate whether or not this is a good idea?

In addition if I pay the taxes out of the IRA do I pay a 10% early distribution penalty and the pay taxes on that amount? ie. Rollover $100,000 tax rate %15 - taxes owed $15,000. If paid from IRA taxes would be 15% of $115,000 and I would incur a penalty of $1500. So toatl payments out of the IRA would be $18,750.

At the risk of asking too many questions in one post - am I correct in the knowledge that the rollover does not count as part of my AGI?

Thanks

VAl

Would this situation run afoul of 409A? SAR for non-publicly traded company is exercisable for cash. Notice 2005-1, Q&A 4(d)(i) states that SAR generally will be subject to 409A, but that they may be structured to comply, and notes that a SAR with a "fixed payment date" generally will comply. Could our plan provide that SAR becomes exercisable 3 years after grant and that the participant may exercise at any time up to 10 years from grant? Haven't been able to find anything that discusses exactly what "fixed payment date" means.

Thanks for any insights or references.

Does anyone know where I can find the HCE definitions from 1991 to 2005? IIRC, it was in 96 or 97 when the ownerhip attribution rules were added to the definition.

I'm looking for the definitions each year, including dollar amount changes.

Any help would be appreciated.

Is money from either an employer's disability plan or from SS considered compensation in order to make an IRA contribution?

I have a DB Plan with 3 EE's (2 HCE's, 1 NHCE). They are funding for a maximum DB benefit for the owner which makes the contribution well over the maximum 404 deductible level. Can I add a Safe Harbor 401(k) plan so that the owner and his spouse and contribute the 402(g) limit plus catch-up into that plan. If the safe harbor 3% non-elective is used, the additional required contribution for the NHCE would be around $300. As I understand the deductibility rules, This contribution would be non-deductible and the sponsor would be required to pay an 10% tax on the $300 ($3.00). The total cost would therefore be $303 to add an additional $36,000 to the owners/Spouse account.

Do I have this correct? Is there any other reason not to do this? If we use the Match safe harbor and the 1 NHCE does not defer, there would be no contribution nor a tax. Correct?

is this one too aggressive or does it fall under the rules?

HCE 5 4

NHCE 3 1

Plan passes ADP. now, I shift 1% of NHCE to ACP and arrive at

HCE 5 4

NHCE 2 2

plan now passes ACP, but one of the rules for shift is plan must pass ADP afterwards. It doesnt.

so can I now treat 1% of HCE as catch up?

Profit Sharing plan that excludes union added 401k. Union are eligible to defer into the plan, but not eligible for ps.

Am I correct that Union Employees are tested separately for the ADP test?

I am 53-yr old with only $10,000 in SepIra at ETrade to trade some stocks. Did not do well there. There is no IRA or 401k anywhere. I am thinking to put $4500 in some Roth IRA. Seek some astute input from you folks.

Have 6-month or so in emergency fund at Capital One Money Market account that pays 2.45% (through Costco deal).

Plan to work for another 15 yr or so (on 1099).

Spent all money that I had to fund two kids in colleges. Now, they are on their own, I need to fund my retirement. I know it's late, but my house and truck are paid off.

Thanks.

Greetings. I am currently a Tax LLM Student, and I was wondering if under a plan where an employer pays the premiums on insurance for employees and the employer also pays the deductible required to be paid by the employee for hospital visits whether the employee can exclude from gross income the payment by the employer for the deductible. Wouldn't this be eligible for the 105 exclusion because its essentially reimbursement for medical expenses because to incur the cost of the deductible, the employee must have engaged in some medical services? On the other hand this seems to be a gain though too...Im so confused...anyone help me?

Have a 20 participant frozen DB that is covered by PBGC.

A 50% owner participant has reached NRA and the document allows for an in-service distribution after reaching NRA. This participants benefit represents 60% of all plan benefits. Is there a problem distributing his entire benefit now?

PVAB's based on 417(e) rate is approx $1,800,000 and assets are approx $1,500,000.

The problem is that his PVAB will decrease with each future year.

Can one plan cover salaried, hourly, and collective bargained employyes ?

Classic medical Affiliated Service Group (ASG) has an LLC with employees and then 2 professional corps for each of the 2 doctors. All conceded it's an ASG but still want a DB plan in each P.C. and a 7.5% MP plan in the LLC for staff. I can permissively aggregate plans and pass 401(a)(4), but have to still bring in staff at "meaningful" benefit levels into each DB to pass 401(a)(26). I haven't looked at any DB offset arrangement possibilities but let's ignore for this question.

Question: Since I have staff in the DB plans for 401(a)(26) I have common participants so I presume 404(a)(7) combined deduction limitations kick in ? The only reason I'm asking is I don't see a tie in the 414(m) code regarding an ASG being subject to Section 404. Is there any argument that each P.C. can deduct it's own DB contributions (including some staff from the LLC) and the LLC can deduct it's own MP contribution without the ASG group being combined for 404(a)(7) purposes ?