Does anyone know the IRS and DOL positions on segregating and depositing elective deferrals for the sole proprietors own earned income? Has there been any recent changes or guidance?

Is it based on when earned income is finally determined?

I recently changed r/k firms and moved here to FL. We got hit with Hurricane Charley three weeks ago, and may get Hurricane Frances this weekend. We still have 5500s that we are working on (or waiting on info from various sources).

Does anyone out there know if the IRS grants additional time when you are located in a federal disaster area? I know they did this for those in the NYC area in 2001. Opinions? Or if you know who, where we can contact the IRS to get some info on this topic?

Thanks for your help!

Three doctors were each Sole Proprietors until 06/01/03, at that time they formed a partnership. (Without consulting with us in advance...)

All of the doctors had calendar year safe harbor 401(k)s. One of the plans was amended to the new plan name on behalf of the partnership. The other two doctors adopted this amended plan.

None of the plan provisions were changed.

Should I combine each doctor's Schedule C (1/1/03 through 5/31/03) and K1 income as calculated (6/1/03 - 12/31/03) and limit each of them to the $200,000 compensation limit?

I am looking to avoid re-creating the wheel, Does anyone have a document they are willing to share?

Thanks

Jim

We have an EE who missed the 30 day deadline upon the birth of his daughter to add her to our medical plan. Now 5 months later he is trying to add her. He claims he is able to add her as a late enrollee and he will pay an after tax premium for her to be added. Since our medical is part of our pre tax cafe plan are we okay in denying his demand? I thought the late enrollee provisions related to preexisting conditions?

The multiemployer health plan offers a discounted cobra rate to participants that suffer a loss in coverage due to a reduction in the hours of their employment. This discounted rate is offered for the first six months and then the rate is billed at the full rate of 102% of the fund's costs. The fund has been presented with the situation where a participant has suffered a loss in coverage due to a reduction of hours and has declined cobra coverage. The participant's beneficiary, however, has elected the cobra coverage. The fund does not want to have to offer the beneficiary the discounted rate. Is the fund required to offer the beneficiary the same rate as the participant in this situation or can the fund charge the full rate of 102%?

Thanks.

I recently took over an account for a client who was set up on a 72t payment schedule in March 2001. He called today & is in a financial bind, needs to take out a 30k lump sum. My understanding is that there will be a 10% early withdrawal penalty on all prior payments (totalling $85,000) plus interest on the penalties. He is not 59 1/2 so the 30k payment will also be subject to the penalty. Looking for info on how interest is calcualted & paid on the prior years penalties. Too bad the former rep didn't carve out a separate IRA for emergency withdrawals.....

Gary, do you have any experience with SEP's owning investment real-estate in under their account? I assume SEP's are still subject to 406(B).

Your thoughts would be appreciated

My understanding is that stop smoking programs are not an eligible medical expense under an FSA Plan. However, due to OTC, would this be considered eligible expenses? If anyone can direct me to a website that shows that this is or is not an eligible expenses that would be appreciated.

Thanks

Joe

Hi,

I'm neither a lawyer, an accountant, nor an actuary...so please excuse me if I mangle the terminology. I am 71 and my wife is 73 and we are considering opening a "solo-DB" plan for the next three to five years that I plan to continue working. One of my goals is to alleviate the tax impact of being forced to start receiving rather large MRD's this year. The value of the DB depends on the deductions I could receive. I have several questions after having 'lurked' on this board the last few days.

1)Is it true that an owner-only plan is considered to have no employees, so is not an ERISA plan and not covered by the PBGC? If so does that fact influence the answer to the next questions?

2) Can I base the defined benefit on the average of the 3 highest years Sch C earnings even though my earnings this year are considerably lower...and probably will continue to be?

3) Will the deductibility of the advertised large contributions be limited to my current Sch C earnings? I have seen statements to that effect, but others that extend the deductible limits to the "unfunded current liability" or to the "accrued liability". Would those likely be larger than my now reduced Sch C earnings, and which prevails.

Any help will be appreciated. Thanks.

A beneficiary under a profit sharing plan elected to receive distributions over her life expectancy. She has taken distributions over her life expectancy for several years, but now she want to distribute the remaining balance this year, instead of continuing the life expectancy payments. Can she? or is she mandated to continue distributions by taking no more than the minimum amount each year. Can the plan require that she distribute no more than the minimum amount

Reading examples of what constitutes UBIT makes my head spin. Can anyone opine whether ALL debt-financed property (within a qualified plan) that generates rental income constitues UBIT ? or is it somewhat dependent upon how the debt (loan) is structured ?

Plan Sponsor is a husband-wife corporation. In 2001, husband went on disability; wife closed all offices but kept the corporation alive to receive residual income and cover expenses. Both spouses began receiving SEPPs under 72(t).

In 2004, husband is 60; wife is 54. Divorce was finalized in 2003; QDRO effective 1/1/04, equalizing account balances in the plan. Wife now wants to increase her SEPP from 12,000/month to 17,000/month to handle increased monthly expenses for house payments, higher tax rates, etc.

The QDRO amount transferred was approx $600,000. If I apply the new calculation rules to the QDRO ONLY, I get an income stream of around $3500/month, which isn't quite enough, but might hit close enough to the mark for her to hold on until she's 59 1/2 (Nov. 2005).

My questions are:

1) Is it possible to simply transfer the income stream the husband was receiving from that portion of the QDRO to her so that I can use the higher amount calculated in 2001? (e.g., If he received $20000/month pre-QDRO and $5,000/month was attributable to her QDRO amount, could that $5,000 simply continue to her?)

2) If I can't do number 1, is it okay to calculate the payments on the QDRO without touching the payments she's currently receiving from her other balance? I really don't want to touch the way the other balance is calculated at all -- it works for her and would decrease under the new rules.

3) At what point can she stop worrying about this and just take whatever income she wants from the plan?

If it matters, NRD in the plan (a profit sharing plan) is age 55.

Thanks so much for any thoughts!

Can someone who has become a US citizen roll pre-tax money from an British pension fund (scheme) into an IRA or qualified retirement plan in the United States?

I'm quite weak on 401(k)s as I deal 95% w/ DB, so pls excuse my ignorance here.

If a plan sponsor fails to make timely deposits of employee deferrals, how is this corrected?

My understanding is that there must be deposits made that include interest, plus 5330 and the 15% excise tax must be filed. Assuming that the interest calculation is correct, is there anything else to do?

The multiemployer health plan offers a discounted cobra rate to participants that suffer a loss in coverage due to a reduction in the hours of their employment. This discounted rate is offered for the first six months and then the rate is billed at the full rate of 102% of the fund's costs. The fund has been presented with the situation where a participant has suffered a loss in coverage due to a reduction of hours and has declined cobra coverage. The participant's beneficiary, however, has elected the cobra coverage. The fund does not want to have to offer the beneficiary the discounted rate. Is the fund required to offer the beneficiary the same rate as the participant in this situation or can the fund charge the full rate of 102%?

Thanks.

Trustees of Multiemployer plan have been approached to allow in two additional employers, both of which have a significant underfunded liability on their existing plans. Would the addition of these employers to the plan (which currently has a funding surplus) implicate fiduciary liability of the trustees of the multiemployer plan?

An employer sponsors a single-employer 401(k). Some of the participants in the plan recently went union. We are now being asked to transfer the union participants accounts form the single-employer 401(k) plan to the multiemployer DC plan. The union sponsors the multiemployer plan.

Is this transfer possible? If so, what is the best way to accomplish this task?

Thanks!!

The transitional rule of 410(b)(6)© refers to certain acquisitions or dispositions of a trade or business. Would the formation (as opposed to an acquistion) of new business be included in that classification??? Thanks.

Does a bottom up qmac have to be made to participants who have terminated, or can it be made to the lowest paid employees who are still employed?