Rules? You expect Congress to write rules that make sense? You must be young!

First, make sure you have the right income threshold for your circumstances. The threshold changes for conversions vs contributory Roths and for married/single. Why? Beats me. I am not sure why there should be any income limit since these restrictions probably only impact about 2% of the population. Gee, are they afraid Bill Gates will open a Roth?

Second, if you still don't qualify for a contributory Roth IRA this year you may qualify for a regular IRA. If so, you can reclassify the 1999 Roth to regular, then if your income is under 100K next year, convert it back to a Roth. Lots of paperwork to get you from point A to .... point A again.

Maybe you should email your Congressman and Senators and tell them you prefer simple rules with fewer restrictions. You get the biggest laughs from a CPA when you talk about tax simplification.

If a top-heavy defined contribution plan terminates prior to the end of the plan year, is the 3% top-heavy minimum contribution for the year of termination based on compensation for the entire year, or just the portion of the year prior to the termination date?

The T-H regulations define compensation as either 415 comp or W-2, neither of which is prorated during the year of termination. Also, the IRS has stated (1995 EA Meeting) that compensation for the entire year is used if a person was a participant in a T-H plan at anytime during the year. Based on this, it seems like a full years's comp is to be used. Is this what others are doing?

My employer contributes to an ESOP (the employees don't). Will this prevent me from contributing to a Roth ira if the esop is over $2,000 a year? Or limit my contributions if the esop is under $2,000?

That sounds right to me, but the minimum distributions are based on vested benefits. If there is a match or PS contribution, it might not be vested.

1) If a active employee/participant turns 70 1/2 must they start taking distributions from the 401(k). 2)Can they keep making elective deferrals. 3) Do they share in Profit Sharing Contributions. 4) Are there manditory distribution requirements on Profit Sharing at 70 1/2 from the plan.

In a terminated defined benefit plan, has anyone ever had a problem doing a post-termination amendment specifying the allocation of surplus assets? Specifically, is there any requirement that sponsor must specify, in a plan provision or pre-termination amendment, how to allocate surplus? can't the sponsor just wait till after calculations rae made and allocate any known surplus during the post-termination period? (The Plan otherwise, by its terms, allows an employer reversion.) In the same vein, is a pro-rata benefit increase or transfer to a replacement plan under Code sec. 4980 the only way to reduce or eliminate a reversion. Any chance the IRS would somehow claim that the plan, after having frozen benefit accruals as of the termination date, "unfroze" them by allocating the surplus in the form of additional benefits and must now go thru the termination process again; re-freeze the thawed benefit accruals; give another 204(h) notice; satisfy min. funding standard for the post-termination year; etc., etc.?? Note, I think the answer is No, there's no problem here, but I m seeking input from others who've actually been through this in real life. For example, PBGC Reg 4041.8 clearly contemplates post-termination amendments to allocate surpluses; and rev. proc. 80-229 contemplates post-termination benefit increases to allocate a surplus, whether by amendment or just plain sponsor action.

I have a law firm that is an LLC (taxed as a partnership) and they have a safe harbor 401(k) Plan. Several partners made elections in the beginning of the year to contribute a specific amount of their draw each month as a salary deferral to the 401(k) Plan. One of the partners is contending that these individuals can "reclassify" the salary deferrals as the safe harbor contribution for the year (i.e. a partner contributed $10,000 as salary deferral but now wants $4,800 as safe harbor and balance as salary deferral). I have a problem with this because the partners made written elections to have amounts withheld from their draw and deposited as SALARY DEFERRALS. However, maybe I'm missing something with the treatment of partnership income since its a little different than that paid to the non-partners. Any insight would be appreciated.

[This message has been edited by Dave Baker (edited 12-23-1999).]

In 2002, I plan to rollover funds from a SIMPLE IRA into a regular IRA and then covert to a Roth. By that time I will have completed paying taxes on my first Roth conversion that took advantage of the 4-year spread. I project that if I covert all of my funds originating from my SIMPLE IRA in one year, I will be exposed to a higher tax bracket. Is it permissible to make the required rollover of all my SIMPLE IRA funds into a regular IRA at one time, and then make a series of partial Roth conversions that permit me to stay in the lower tax bracket over the following 2-3 year period?

Can a partial interest in an IRA be disclaimed? In other words, can $30,000 of a $50,000 IRA be disclaimed and the balance not disclaimed? Could it be a dollar amount or a percentage, or either?

Thank you

What determines how long an induvidual can be gone for Jury Duty. At what point and to what degree does an employer have the right to fill a vacant position due to extended jury duty.

I am having difficulty finding guidance on this topic. If anyone should have an answer for this and particular guidance to support the answer it would be greatly appreciated.

I have received conflicting answers of 30-days after the end of the year or by the due date of the partner's individual tax return.

Does anyone know if/where I can find the EA Gray Books online?

Our client is wrapping up a §403(B) audit that was initially focused on 1997, but will probably include 1998 and 1999 voluntarily (I see no harm in this since the CAP fee stays the same, the audit is limited to contribution limits, and the '97 violations will carry forward).

Going forward in 2000, they would like to use some software to monitor the tests. Is there any software that can do this for them? If so, does it calculate the exclusion allowance and/catch up elections? Note we will also require providers to do tests, under hold harmless.

Any thoughts are appreciated.

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Are there any articles or opinions concerning potential liability of a fiduciary for the poor investment decisions of participants made in the Self Directed Brokerage option of a 401(k). Isn't this is really giving the participant the ultimate freedom of choice under 404©.

(I previously posted a similar query under "Retirement Plans in General". Thought I might generate more response here.)

Want to install a cross-tested MPPP with the understanding that the allocation formula might need to be amended from time to time in response to changing revenue and/or employee demographics. Have seen a number of threads noting the IRS' "dislike" of frequent formula amendments in a MPPP. Does anyone know if this "dislike" has any statutory basis? Has anyone had any experience with the IRS regarding this issue?

My expertise is in retirement plans and I only know the very basics about the FSA. I have two questions regarding my husband's flexible spending account:

1. If he commits to making $2,000 contribution for 2000 and terminates 6/30/2000 after contributing $1,000, is he still required to make the $1,000 additional contribution? If yes, how since no payroll deduction?

2. If the answer to #1 is no and at 6/30/2000 he has spent $1,500 of the account, how does he contribute the remaining $500?

Thanks for educating me.

Situation. Single person makes $90,000 from employment, contributes 15% to 401K.

Also has private practice that earns $9,000 and contributes 13% to SEP.

so: Total income = 90K + 15 K = 105 K

retirement contrib =

90K x.15 = 13,500

9K x.13 = 1,900 totals 15.4K

so would AGI, or MAGI, = 105-15.4= 89,600

and thus would be full eligible for Roth contribution. help appreciated. thanks larry

A lot of mutual fund companies will do this subaccounting on an individual basis. American Century and Kemper (through the KemFlex product)come to mind. I can't say I remember the costs, though.

Well, at first I screamed: "NO NO NO"! But then I looked over 72(P), and other documentation, and began to second guess myself (which is often the case lately). I posed the question to a colleague who, after much reluctance, agreed you can do it. I guess this is one of the primary disadvantages in allowing multiple outstanding loans.

Great question. I'm eager to see other responses.

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A Plan states: You enter a Plan the first the day of the month which is next following completion of six months of service.

A employee starts on Jan 1. Does he complete 6 months of service on June 30 or July 1?