I think that the comp limit (now $170K) must be used for all match computations. I don't think you should ever go over the comp limit for purposes of computing either deferrals to the plan or match on the deferrals.

I have been told only "dollars" can be put in a Roth IRA. But I need to find a legal and IRS-acceptable-way to deed real estate into a Roth IRA.

I understand one can put into his or her Roth IRA only $2000, or the amount earned during the year, whichever is less. Assuming one owns a piece of land valued at $2000,and that person made at least $2000 in the year, how can that person make his or her $2000 contribution to the Roth IRA --in the form of land--so that when the land is sold in later years, the profit will remain under the tax protection of the Roth IRA, as it would if it were stocks or bonds?

Surely there must be a way, or someone who is developing a way. After all, Irrevocable Living Trusts and Revocable Living Trusts were invented to address legitimate needs such as the need to avoid probate. This too is a legitimate need that needs a solution. Any ideas? I would greatly appreciate your help in finding an answer, or in directing me to individuals who may have answers. I will gladly send $100 to the first person who can provide me with a legal and IRS-acceptable-way to deed real estate into a Roth IRA.

Thank you for your time.

Mr. Martin

If the IRS eliminates "new comparability" plans, wouldn't it be possible to recreate the same plan as a cash balance plan with accruals based on the same investments as in the DC plan (as opposed to being linked to US Treasuries)? [OK, so you would have to deal with QJ&SA waivers and PBGC premiums and waste money on actuarial fees, but couldn't you get to essentially the same position?]

How are actuaires doing 401(a)(4) testing for "self-directed" cash balance plans? As far as I can tell, the big firms regard that info as a trade secret, and the IRS pretty much lets them do what they want.

It seems to me that unless the IRS issues some guidance on how to do (a)(4) testing for cash-balance plans, it makes no sense to go after new comparability plans. Am I missing something?

I've read that your AGI must be below $100,000 to convert from a traditional ira to a roth ira. Is this the maximum AGI for an individual taxpayer? What is the maximum AGI allowed for a married couple filing jointly looking to convert one spouses account.

If an IRA has multiple primary beneficiaries, must each of the beneficiaries elect the same distribution option? For example, if one beneficiary choses to take a lump-sum distribution, are the others forced to do the same? Or can they each make their decision independent of each other?

We have a new client that left their prior record keeper on bad terms. The client is unable to locate the 1998 5500c/r's and the prior R/K is not going to help (I really don't think they have them anyway). How can I/the client go about requesting copies of the 5500c/r's from the IRS? Is this possible? Any suggestions would be appreciated.

In determining the previously excluded contributions component of the exclusion allowance, are SEP, SARSEP and/or SIMPLE contributions included? Neither the regs nor the final audit guidelines specifically cross-refer to them. Although a tax-exempt cannot maintain a SARSEP, a for-profit educational operation could have maintained one and then elected to go not for profit, qualified under 501©(3) and adopted a 403(B). As for the SIMPLE, the Code requires that it be the only plan. An employer could have adopted the SIMPLE, frozen it and then adopted the 403(B).

Does anyone have any thoughts on whether these contributions are part of the previously excluded contributions component of the exclusion allowance?

Wondering if it's possible to use privately held company stock to fund an employer match inside a 401(k) program? If so, does it make sense especially if the rest of the plan will be held in a daily valuation environment?

Due to error by employer (or their payroll service), a participant (NHCE)who elected to defer the maximum allowable under the plan was capped at $6,200 in 1999 (calendar year plan)instead of $10,000. He was not capped due to 415 or document limits - employer just goofed.

Obviously, participant is upset. He also missed out on about $800 in matching contributions.

How does employer make participant right?

Any suggestions will be appreciated.

I know that, with a traditional IRA, if your basis (cumulative Non deductible contributions) exceeds your FMV, and you pull everything out, you can take a loss. What about a conversion to a Roth? Can you take a loss in that instance?

A plan discovered recently it failed ADP test in 1997. HCEs are entitled to refunds and earnings. Some of these HCEs took distributions and rolled over into an IRA. Therefore, they rolled over ineligible amounts. These should be subject to excise taxes, etc.

It was discovered also that the plan failed to make matching contributions. The amount of the failed match exceeds the amount of the refunds due.

Rather than notify participants that the initial rollovers were partially ineligible and issue new 1099-Rs, etc. The plan would like to recharacterize the amounts rolled over as really a rollover of the failed matches. Thereby saving the HCEs and the plan the headache. Then the failed match money (in a separate account) distributed now would be considered distribution of the excess from the ADP failure.

I think this is a risky position to take. Sure, money is fungible, but there is no authority for a recharacterization like this. But, what is the downside if its wrong? Anyone see anything beyond having to go back and fix the error? Extra Penalties, etc.? Thanks.

A plan discovered recently it failed ADP test in 1997. HCEs are entitled to refunds and earnings. Some of these HCEs took distributions and rolled over into an IRA. Therefore, they rolled over ineligible amounts. These should be subject to excise taxes, etc.

It was discovered also that the plan failed to make matching contributions. The amount of the failed match exceeds the amount of the refunds due.

Rather than notify participants that the initial rollovers were partially ineligible and issue new 1099-Rs, etc. The plan would like to recharacterize the amounts rolled over as really a rollover of the failed matches. Thereby saving the HCEs and the plan the headache. Then the failed match money (in a separate account) distributed now would be considered distribution of the excess from the ADP failure.

I think this is a risky position to take. Sure, money is fungible, but there is no authority for a recharacterization like this. But, what is the downside if its wrong? Anyone see anything beyond having to go back and fix the error? Extra Penalties, etc.? Thanks.

We have a church that has approximately 20 people on payroll. There are 4 full time (3 salaried, 1 hourly), the remaining work under a variety of part time arrangements (salaried and hourly). We don't track hours for salaried part time and hours for the hourly vary from a few hours a week to 30+. Can we have a 403(B) plan to cover only the 4 full time with employee and employer contributions? How do we do this in a adoption agreement? Are we considered a nonelectiving church plan? Do we have to offer all employees the right to make employee contributions even if we don't plan on making any employer contributions to them? Do we have discrimination issues to worry about? Do we need to file a 5500?

please go to the website:

www.aspa.org/govpages/ASPAgovt.htm

ASPA has a survey to compile data they would like to be filled out regarding cross tested plans.

based on their latest conversations with the Treasury, any new regulations would not be effective until the first plan year beginning after 12/31/2001 for plans already in place. for more info, visit their web site.

Hello,

I have two simple questions that I may be making more difficult than they really are.

1. How much did I contribute to my Roth for tax year 1999?

2. What were my net Roth contributions for 1998?

The details:

1. I contributed $1500 to my Roth with "Company A" from 5-98 to 12-98.

2. I contributed $500 to same Roth from 1-99 to 3-99.

3. I closed "Company A" Roth and rolled over funds to "Company B". Here is what my "Company B" statement says:

4-6-99 Rollover contribution 1999 $1500

4-6-99 IRA Contribution Year 1998 $500

4-6-99 IRA Contribution Year 1999 $2000

I told "Company B" I wanted the $500 to count towards the $1500.

I recently received 1999 FORM 5498 (IRA Contribution Info.) from "Company A" which says: Roth IRA Contributions $500.

I have never withdrawn any funds other than to rollover within 60 days.

Thanks for any assistance.

Although I've been at this for quite a while, I've had little exposure to the restrictions until recently due to the low (but thankfully increasing) CL rates, combined with the RPA mortality. I now have some clients faced with this problem, often takeover plans with previously imprudent funding. I'd be interested in hearing any favorable experiences with bonding or letters of credit. Does this work, and are there reputable financial institutions capable of and experienced with dealing with this within reasonable terms? I wonder in particular about how such an arrangement could be structured without a time limit. How or why would a Bank, for example, agree to an open-ended time limit, other than for a very wealthy HCE with substantial additional invested assets? Any favorable experiences, other than monthly payments, or simply waiting till the ratios improve , which in some cases may take many years?

P.S. When will we get spell check on Benefits Boards?

[This message has been edited by AndyH (edited 03-24-2000).]

My wife made a contribution to a Roth IRA for Tax year 1998. When we were doing our taxes for 1998, we decided that since her contribution to a traditional IRA would be deductible, we would go that route. I thought our broker had completed the conversion via verbal directions (didn't know I had to fill out a form, and was not advised), but I recently found out the conversion was not completed. Is it possible to make that conversion now for 1998 since this was an error? What are my options and requirements?

Do I have to make "family" health coverage available to all employees? If so, does the contribution amount need to be consistent?

[This message has been edited by citardm (edited 03-20-2000).]

CAN A 'CONSERVATIVE' ROTH FUND BE TRANSFERRED TO AN 'AGGRESSIVE' ROTH FUND WITHIN THE SAME FUND COMPANY WITHOUT PENALTY.

An employer maintains a SIMPLE IRA during January and February. It the terminates the SIMPLE and starts a 401(k) plan. Can a SIMPLE be terminated during a plan year? Bigger problem, since the SIMPLE is not the "exclusive" plan for 2000, are the contributions to it excess contributions? Does the 4973 excise tax apply? Could all deferrals to the SIMPLE be distrbuted under the 408(d)(4) rules before the filing of each participant's tax return? Real situation. Thanks.