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Hi,

Thank you as always for all the insights. The 5500 for a 6/30/2025 plan year end, is due by 1/31/26. This came out on Saturday. Therefore, the 5500 and the 5558 must be filed ON or prior to 2/2/26 (since 2/1 26 was a Sunday). We filed the 5558 on 2/2/26 ( today) with I file and got a validation error that stated " you have filed the form 5558 after the return's normal due date and may not be approved for an extension based on this form 5558 that was submited". I hope this is an error on their part and the extension will be approved? Thank you

Hoping that Mike Johnson doesn't see his shadow and give us 6 weeks of government shutdown!

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I have an issue I have not come across before. A (new) client sold his home healthcare company in 2023 in a membership interest sale. The business offered a Cash Balance Benefit Plan to its employees. The Benefit Plan was to continue after the sale. The seller made (on bad information) a high dollar value ($250k) contribution to the Benefit Plan after the sale was completed. The parties did not complete the paperwork to make the change of the trustee and employer under the benefit plan until the end of 2023. For the purposes of the Plan, when the contribution was made, the seller/contributor was still the "employer" under the Plan. The Plan contains a provision stating: 

15.02 Return of Employer Contributions. Upon written request by the Employer, the Trustee must return any Employer contributions provided that the circumstances and the time frames described below are satisfied. The Trustee may request the Employer to provide additional information to ensure the amounts may be properly returned. Any amounts returned shall not include earnings but must be reduced by any losses.

            (a) Mistake of fact. Any Employer contributions made because of a mistake of fact must be returned to the Employer within one year of the contribution.

            (b) Disallowance of deduction. Employer contributions to the Trust are made with the understanding that they are deductible. In the event the deduction of an Employer contribution is disallowed by the IRS, such contribution (to the extent disallowed) must be returned to the Employer within one year of the disallowance of the deduction. 

Seller believed he could deduct the contribution but was mistaken about this. He has since demanded the return of the funds many times. Buyer has not responded to the demands and threats of litigation.

Although the sale of the business included the Cash Benefit Plan, that contribution was not in the Plan at the time of the sale and was not bargained for in the transaction. The Buyer has failed to comply with regulations and was dropped by the third party administrator as a result, about 1 year after the sale of the business. Client's previous attorney sent a demand letter and received no response. I did the same and was told they would be responding, and since have received no further response. 

If anyone has dealt with anything remotely similar or has any suggestions on proceeding, I would be grateful. 

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I'm sure this has been asked.  I have an owner who is terminating his small 4-employee Profit Sharing plan, and turns 73 in 2026.  typically we would make sure that a participant takes their (generally already existing annual) RMD prior to rolling the remaining funds, however he technically has until 4/1/27 for the 1st RMD.  Is it ok to let him defer and allow all monies to transfer to an IRA now?  this is assuming he may want to defer, and I'd like to have an answer ready, partly for myself and any future scenarios.  He may not care and want it this year.  He has a significant balance so may not want two taxable required distributions in 2027.

thanks in advance for any insight!

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Wife has an LLC with no employees.  Husband has an LLC with no employees. Both own 100% of their own LLCs.  The Wife's LLC pays the Husband's LLC.  It is not clear if the Husband has any other source of income in his LLC.  They both would like to set up a solo 401k plan.  Do they need 2 separate plans or could both LLCs adopt the plan and only set up one plan? 

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