For RPA current liability purposes, is a no pre-retirement mortality assumption allowed? Stated differently, if a no pre-retirement mortality assumption is used for all other purposes, can it also be used for RPA current liability purposes?

Thanks,

Ishi

I received a 1099-r for $13,921 after defaulting on a 401k loan. It was a $10K loan and $3,921 in interest. Do I have to claim the interest and pay taxes and penalty's on it?

Our client is a wholly owned US subsidiary (company A) of a foreign company. Also, the foreign company wholly owns another US subsidiary (Company B) that is independent and separate, in all respects, from our company. Companies A and B each sponsor a 401(k) plan for their respective employees. Based on Section 414(b), companies A, B and the foreign parent are members of a controlled group which means employees in A and B must be aggregated for plan testing purposes. However, due to the difficulties with companies A & B cooperating in assembling the necessary information for a controlled group arrangement, Company A would like to designate itself as a QSLOB.

I have read IRC 414®, the regs thereunder, the preambles to the final regs and the proposed amendments to the final regs, and believe I have a good grasp on the elements required to become a QSLOB. However, none of these sources have shed light on who is considered the "employer" for purposes of filing the required Notice and submitting to the IRS a request for determination regarding administrative scrutiny.

Treasury Reg. Section 1.414®-4 provides that "[t]he employer's notice for the testing year must specify each of the qualified separate lines of business operated by the employer...." Further, the instructions for Form 5310-A states that "[o]nly one notice per employer ... is required." Based on those statements, it appears that the IRS contemplates the parent company file the notice on behalf of all its subsidiaries that wish to be designated QSLOBs. However, our client's foreign parent company has no interest in filing such a notice.

Instead, our client wishes to file the notice with the IRS on behalf of its own QSLOB status. It does not want to be responsible for Company B's own QSLOB status. Can our client file the notice on its behalf only; and then can Company B file its own notice? Similarly, with a request for a determination regarding administrative scrutiny, can our client submit a request for its own QSLOB status or does it need to be coordinated with the other members of the controlled group?

Any help or insight on this would be greatly appreciated.

Thanks!

I need some help on this one. Company A sponsors large self-insured health plan

named "Company A Health Plan" and sent HIPAA privacy notices to all primary members Feb. 2003. Company A also owns 98% of Company B which sponsors a small (under $5 million) self-insured health plan named "Company B Health Plan"

Company A also owns majority interest in several other LLC that sponsor small self-insured plans in the LLC business name.

Question: Are each of these plans a different Covered Entity? and if so,

if more than one the seperate plans uses the same Business Assoicate is it necessary to have seperate BA agreements written in the name of each plan?

My gut feeling tells me each of the plans sponsored by Company B, C, D... will need to have seperate privacy notices/BA agreements/plan addendums in the plan (Covered Entity) name. They will not beable to simply rely on the parent "Company A" HIPAA compliance as compliance for all its owned LLC company health plan compliance(since a company is not a Covered Entity it's health plan is).

Let me know your thoughts

I have a DB plan where the sole proprietor has more than one business and files more than one Schedule C. These are all one-man businesses--no employees.

He adopted a DB plan for one of the businesses a few years ago (let's call the business Business A). None of the other businesses has since adopted the plan. For the DB calculations, only Business A's income has been used in determining the benefits and contributions. For 2003, the contribution is about $78,000.

I received a copy of the 2003 Form 1040, and line 12 (re total income from all Schedule C's) shows a small loss. Although my sole proprietor has positive income from Business A (as shown on line 31 of that Schedule C), the other businesses had losses and lead to a negative amount on the 1040.

My question is:

a) Can he deduct the DB contribution for 2003 (at least up to his SE income from Business A's Schedule C), or

b) Is he unable to deduct any of the contribution because of the overall loss showing on line 12 of the 1040 (showing all of the Schedules C for 2003)?

Is a participant who is on strike considered to be on an unpaid leave of absence for purposes of making loan payments? Can he suspend for up to one year if the loan policy allows for suspension?

What about a person who is laid off? Are they considered terminated or on an unpaid leave?

Thanks

Has the Service changed its position on whether a corporation can deduct contributions made for employees of another controlled group member? My understanding is that it is not generally an ordinary and necessary business expense for one corporation to provide retirement benefits for the employees of another corporation, even if the two corporations are in a controlled group. Ours is NOT a situation that would be governed by Section 404(a)(3)(B), which permits one company of a controlled group to deposit a profit sharing contribution for another member of a controlled group if the other member does not have profit and the contribution is based upon the profitability of the company. Rather, profit sharing contributions are made notwithstanding earnings and profits.

If in a brand new Cafeteria Plan only first month employee contribution is funded. If one persons Health reimberment is greater than the money available, how do we handle.

I think i know the answer to this, but need a little confirmation. If a participant terminates with less than 500 hours (therefore not receiving PS alloc), but was eligible for deferrals, does the participant need to be included in the average benefits test?? Thanks.

A husband dies in January 2004. Can the wife make an IRA contribution on his behalf for the 2003 tax year and claim the deduction on their joint Form 1040. The husband qualified for the IRA contribution, no other retirement plans etc.

I want to be able to setup and calculate a New Comp plan.. Can anyone point me to a good source where I can learn ? As much as I dont want to take business away from the one who is doing it for me... I need to know how to do this if I am going to suggest it to a client.

Case I am working on (and I think a new comp would be a good plan) 2004 calendar plan year

Census below shows EE status, then DOB, then comp

Owner A.... 6/62.... $120,000 ....(comp can go higher.. $200K)

Owner B.... 7/61.... $120,000 ....(comp can go higher.. $200K)

EE 1.... 2/56.... $150,000 ....(right hand man, Key)

EE 2....9/57.... $80,000

EE 3.... 11/79.... $32,000 ....(enters 1/05)

EE 4.... 12/70.... $60,000 ....(enters 1/05)

EE 5.... 1/70.... $40,000 ....(enters 1/05)

EE 6.... 6/74.... $80,000 ....(Key)

EE 7.... 6/71.... $25,000

EE 8.... 5/69.... $52,000 ....(spouse of owner)

EE 9.... 9/64.... $52,000 ....(spouse of owner)

EE 10.... 5/63.... $25,000

EE 11.... 11/70.... $60,000

I am not asking for someone to perform the calculation.. maybe an opinion and as stated earlier... point me to where I can read more.

thanks!

Based upon the following details, what is the EE's allocation?

An EE's DOH = 06/01/03. Their compensation from 06/01/03 - 12/31/03 = $12,400. The plan has a 90-day service requirement with quarterly plan entry dates. Therefore, the EE is eligible to join the plan on 10/01/03. The EE's compensation from 10/01/03 - 12/31/03 = $5,400. The plan is top heavy.

The document defines Compensation to "include only Compensation while the Employee is an Eligible Employee".

The contribution allocation for this class of EE is 5.5%: for the owner class it is 15%.

My concern is that the normal allocation of $297 (5,400 x 5.5%) is less than the top heavy allocation of $372 (12,400 x 3.0%).

Is my concern valid? What's the correct allocation?

We self administer our flex plan, including premium pre-tax election, flexible spending accounts and flex daycare accounts. Fewer than 50 invididuals participate in the flex spending account and daycare accounts. However, over 100 participate in the pretax premium benefit.

Is our plan subject to HIPAA? I'm trying to determine if we need to amend our plan with regard to HIPAA, provide privacy notices and designate a privacy officer, etc.

cuhouston@houston.rr.comI own 85% of a closely held corporation. The company recently repurchased the other shareholder's stock (15%). The seller was not a related party. Can my Roth IRA purchase these shares from the company at the same price the company paid for them? Would it have been okay (better) if the seller had sold them directly to my Roth IRA?

I have a profit sharing plan(comp to comp, not cross-tested) with a last day and 1000 hours requirement and 3 participants. One worked 575 hours but did not terminate. She is only eligible for the top heavy minimum. They do not pass coverage without her so I think I can test under 401(a)(4), which passes. My question is: Does the gateway minimum come into play in this instance since it is not a cross-tested formula? Would she have to get a 5% Gateway instead of the 3% top heavy minimum since she is not eligible for the regular profit sharing allocation?

I am considering buying a small business. By purchasing it with my ROTH IRA, I am told that I don't have to claim the income from the business but allow it to accumulate as a business asset.

This makes me nervous as I don't want to put my ROTH in violation of IRS code. Can anyone help guide me or point out some traps to avoid?

My understanding is that you must add together all your IRA money when calculating how much of your basis in any IRA account is credited against a conversion of part of your IRA money to a Roth IRA. So, for example, assume I had two IRAs, one with $10K value and an after tax basis of $4K, and a second IRA with $30K and no basis. If I convert the first to a Roth IRA, I can only exempt $1K of the $4K basis since it is pro-rated on the total amount ($4K times $4K/($10K+$30K)). The same rule would apply to a distribution as a conversion.

My question is when do you calculate the value of the IRAs for the purpose of prorating the basis - at the time of the conversion, or at the end of the year for tax purposes. Suppose that the $30K is in a 401k. Could I convert the $10K IRA and exempt the full $4K basis in March, then in July roll over the $30K 401k into an IRA. The tax return would show a distribution from an IRA with an exempted amount, a residual basis of zero, and $30K still in an IRA.

We have an S-Corp (2 employees - both owners) - we are making a profit sharing contribution for 2003...when is it due?

Must the contribution be submitted by 3/15 when the S-Corp tax return is due?

Or can the contribution be submitted by 4/15 when the participants (two owners) individual tax return is due?

Thanks!

One of the new guys at work is eligible to make catch up contributions. If he maxes out his normal contributions at the 20% that the company allows, is he eligible to make the catch up contributions as well? He will probably be a HCE (barely) this year if that matters.

The HR rep initially told him that because he was "maxed out" on the %, he was not eligible for catch up. She then changed her mind and said she would look into it.

Thanks,

Ok, a multiemployer plan is generally defined as a plan to which more than one employer contributes and which is maintained pursuant to one or more collective bargaining agreements between one or more unions and employers. A multiple employer plan is all other plans to which more than one employer contributes.

A non-Taft Hartley plan covers the employees of more than one unrelated employers. Some of the employees of these employers happen to be "unit" employees. Is this automatically a multiemployer arrangement b/c the plan provides benefits in certain cases to employees pursuant to a CBA, or can it fall in the multiple employer category b/c the plan is not jointly trusteed by labor and management?

Thanks.