If a house owned by a Living Trust is used at spouse's death to fund part of a By Pass Trust, would any income tax benfits be lost? In particular I am concerned about the ability to use the $250,000/$500,000 expentions from profit on the sale of a residence.

Thanks for any help with this question?

Wife is beneficiary of Husbands IRA. Living Trust is contingent beneficiary. IRA is in a single account at a broker.

Value of IRA is well beyond $650,000 estate tax exemption. Assets in Living Trust are only $600,000 of which half are applicable to Wife.

QUESTION:

Can Wife disclaim part but not all of IRA and thereby have the disclaimed part flow to the Living Trust and then into the By Pass Trust? Also Wwuld half or all of the disclaimed amount flow into the By Pass Trust. In the example given how much would have to be disclaimed to fully fund the By Pass Trust.?

Thanks for any help with this.

Bmorr

I contributed $4000 to Roth IRA for 1998 and 1999 around March of this year. It looks like I am likely to hit the $150,000 barrier for contribution eligibility by the end of 1999 (I am married filing jointly). Is it true that the best way to deal with the situation is to roll 1999 Roth IRA contribution over into 1999 IRA contribution? Is it true that I have to remove the proceeds from this contribution too? If yes, how do I compute the accrued interest/capital gains on the $2000 1999 contribution and separate them out from the interest and proceeds on the $2000 contribution for 1998? (The task may be nontrivial, since I already bought and sold quite a few shares on the account. What is the penalty for the rollover?

Any insight will be greatfully appreciated.

Alex

I'd appreciate getting names, addresses or contacts at firms which do audits of medical claims at TPAs for self-funded programs. What has been your experience or results with them?

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Inquisative

As a correction for and ADP or ACP Test does the Bottom Up QNEC method need to be specifically stated in the plan document? The document I am using for this plan only states QNEC not Bottom Up QNEC. If so, can I restroactively amend the plan to the year that test failure occured? Any regulations that you may have would also help.

The defined contribution plan currently has significant balance in forfeitures. Plan document says "forfeitures may be used to reduce employer contributions.."

Plan expects results of VCR to require $100,000 payment to Plan (some of which goes to former participants).

Question: Can/should the VCR liability be satisfied from the forfeiture account? Any regs, cases, opinions greatly appreciated.

I am a Plan sponsor of a Profit Sharing plan

with a 401(k) feature for a small brokerage firm. The Plan is relatively

comlex including Mutual Funds (for non-vested monies), a self directed

brokerage account and our company's stock (privately held). We have some

concern regarding the certificates that are held for benefit of our Plan

participants in these self directed brokerage accounts.

We feel that we need to keep these physical certificates held in the

participants name because if the firm goes under we would have these

certificates and the Plan would be whole. We are protected by SIPC and we

have a fidelity bond for the Plan but how can we protect the Plan if the

firm becomes insolvent? Can we hold these shares in "street" name?

President Clinton is proposing prescription drug coverage for Medicare. Should Medicare coverage be expanded in this area? I believe the "average person" already assumed there was such coberage. (Similar comments apply to lont-term care.)

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Ray Berry

Two companiies wish to merge. For a number of reasons they want to terminate one 401(k) plan prior tho the merger and distribute its assets. The remaining 401(k) plan would then cover the employees of the merged entity. As I read the successor plan regulations, if a termination takes place prior to a stock deal, then there is no successor plan problem because the control group for purposes of the successor plan rules is determined at the time of the termination. However, if the termination takes place prior to a merger there would be a problem because the same "employer" would then be maintaining another 401(k) plan.

Do other people have the same understanding? Isn't this a distinction without a real economic difference? What if immediately after the stock deal the company with the termnated 401(k) plan is liquidated?

What recourse under ERISA or otherwise would the sponsor or trustees of a defined benefit plan have against a plan participant to recover excessive distributions made to the participant over a period of several years? The plan has already stopped future benefit payments but is still considerably in arrears. Also, the participant initially notified the administrator that the payments were too large but the administrator ignored the advice and kept the payments coming.

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Section 403(B)(12) provides that, for purposes of applying the nondiscrimination rules of that section, a plan may exclude "employees who normally work less than 20 hours per week." What does "normally" mean? For example, how do you treat a part-time employee who works more than 20 hours some weeks, and less than 20 hours other weeks?

A company that maintains a self-insured medical plan (with stop-loss) wants to encourage certain employees to accept early retirement. To that end, the company will offer certain employees who are 60 with 30 years of service retiree medical.. Is this a 105(h) problem? Thanks. Ed

I received this message in my personal e-mail. Any Marylandites willing to give it a shot???

My boss told me 2 days ago he is taking the next 8 days off of work. He is

a surgeon. This means if he is away, I can't work. The whole O.R. staff

doesn't get paid! What are my rights? I was hired as a full time employee

40 hours a week. Can we collect unemployment for that whole week? We

can't use our sick time. And I'm not planning on taking my vacation until

the end of August when I fly to California. This is very frustrating, had I been given notice I would have arranged my trip around the time my boss

was away. Where can I find these questions out at? I live in the state of Maryland.

A company of 14 employees wants to establish a short term disability plan. Currently they have unlimited sick days a an LTD plan after 6 months. The President wants to do the right thing for his employees. What is the standard for a small business? Any suggestions on a plan?

Thank You for your response - Kathleen

I have a client that wants its KSOP to borrow money from a bank to allow the KSOP to purchase additional employer securities. Once those employer securities are purchased, the loan would be paid back with a combination of employee deferrals and employer contributions (that is, employee deferrals would be used to purchase the employer stock from the KSOP such that the stock would be allocated to the participant's account and the cash would be used by the KSOP to repay the loan). The employer does not want to repay the loan only with employer contributions because the employer sees this as unfair. Is this OK?

is there a place to get the 30 yr Treas const. maturity rates? ASAP ASAP has a nice summary but was last undated 3/15/99.

A 401(k) plan provides for participant-directed investments. One of the investment options is an employer stock fund. The employer stock is bought and sold on the open market. There is a trading fee of $35 per transaction for purchases or sales of employer stock within the fund. Is there any reason why this fee cannot be charged directly to the account of the participant who directs such a transaction?

Does anyone have any experience with affiliated service groups in an audit or a PLR?

We have a client that is a surgical practice (C corp) owned by 13 doctors. The corporation provides medical services to the general public and day call services to all area hospitals (they bill the patients, not the hospital).

12 of the doctors have formed an LLC which will provide trauma call services to patients of one hospital. The LLC will receive a flat monthly fee for daytime trama services, and this will be the only compensation to the LLC for daytime trauma call. It will bill the patients directly for nighttime trauma services. The only other employees of the LLC besides the doctors will be leased from the C Corporation and used for billing. The LLC will not have a new location.

A few patients would receive services from both entities.

We are concerned that if the LLC elects to be taxed as a partnership, attribution rules will cause the new entity to own most of the C corp. (the new entity will be deemed to own the individual doctors' shares of the C corp.) If we do have some cross ownership then we have to deal with the A-Org test of the ASG rules. Neither entity provides services to the other, so that's not a problem. We think the problem will be if the two entities are seen as regularly associated in providing services to third parties.

We think that if the LLC elects to be taxed as a C corp. then we'll have no cross ownership since the attribution rules are different for C corps. BUT the additional FICA cost will be substantial.

We would appreciate any help we could get on this.

Can a defaulted loan be used to satisfy a 70 1/2 minimum distribution for a terminated participant? Any regulations you can reference would also help. Thanks!

I had a rocedure performed in Septmeber 1998. I got my bill in 1999, after the insuracne comanies haggled over who was primary vs. secondary. Can I receive reimbursement in 1999?