A client converted a rollover IRA in 1998 and elected to spread the income over 4 years. He now wants to make contributions to a Roth for 1998 & 1999.

Is is necessary or advisable to keep these two accounts seperate? ...or can the contributions be added to the Roth Conversion account?

JP

Can a Money Purchase Pension Plan be amended to 401(k)? Non-profit organization currently has MPPP to which employer makes contributions and a 403(B) to which employees make contributions. They would prefer the less restrictive investment options under the 401(k). Instead of terminating the MPPP can it be amended to a 401(k) to avoid full vesting? There are currently 34 participants in the MPPP only 2 are fully vested. It has a 5 year graded schedule and most of the employees have been there 2 or less years. The 401(k) plan would provide either a fixed match or a fixed profit sharing contribution equal to the same % currently going to the MPPP. Since COLAs are not permitted in a MPPP, I have serious doubts that it can be done but I'm looking for a yes answer. Thanks.

I have both a contributory IRA as well as a Roth IRA that I just opened. I recently made my 1998 contribution of $2000 in the Roth IRA. I will not be making any contributions to the contributory IRA. Is there anything I need to put on the 1040 in regards to either of these IRA's since my contribution is not tax deductible?

We returned contributions to HCEs on 3/15/99 (failed ADP test). We've received conflicting advice on timing of 1090-Rs to participants.

1. Must the 1099-Rs be sent to participants in Jan. 2000? Permissible to send earlier?

2. Must participants wait until 2000 to amend their 1998 returns?

3. Why does the IRS require refunds to participants by 3/15 to avoid the excise tax to employers if 1099-Rs don't go to participants until end of year?

has the irs released anything re: safe harbor match and whether it can be used to satisfy th minimum contributions?

i heard that it was pending and read that it was "anticipated that they would allow it".

i have set up a safe harbor 401k for a small dentistry and only 1 out of 3 staff ee's have deferred. i am hoping that the one person that deferred will not have to be given the th min in addition to the match she will be receiving.

thanks

What should be done in the situation of a nonqualfied deferred comp plan where none of the amounts have been included for FICA wages?

The first retiree under the plan is now retired and going to receive annual payments. This is a non-account balance plan, so the actuarial calculation should have been done in the year in which he became vested. It was not. How to correct for this - is there a difference for certain years? Do we go back and calculate his vested amount each year and amend returns for the open years? What about amounts that should have been inlcuded during closed years? Or do we calculate the present value now and include that amount as FICA in the current year?

If anyone has suggestions for correcting this I would appreciate it. There are also other employees covered by the plan, earning benefits, none of which have ever included any amount as FICA wages.

We are looking for a detailed class to teach/refresh the entire 401(a)(4) testing material: cross-testing, rate group testing, imputing disparity, etc. and how they all relate to each other. Has anyone attended anything that they would recommend? Thanks.

I don't deal with SEPs and SARSEPs that much. How do you calculate eligibilty on these plans.

My reading of the code leads me to believe that if you have a one year, a two year or a three year these are not EXclusions the way one calculates eligibility in a pension/profit sharing plan, but INclusions. IE you look at the population the end of the year and say "ok, who worked for me during the last twelve months" or 24 or 36 and if they did, they are IN the plan.

Is this correct?

The adoption agreements of most prototype documents contain a section requiring acceptance by the prototype plan sponsor. In that way, the documents cannot be used without the knowledge and consent of the prototype sponsor. What happens if the prototype document is used without the sponsor's written consent? Is the Plan a valid adoption of a prototype? Is this a qualification issue?

I mistakenly contributed too much to my

Roth IRA. (I contributed more than my earned income) I removed this excess 1998 contribution and its gains before the 1998 tax deadline. I am fairly sure that I am not subject to the 10% penalty or the 6% since I removed them before the 98 tax deadline. I am not sure if:

1)I declare these gains on my 98 taxes or my 99 taxes

2)I will recieve a 1099-B or 1099-R (I think it should be a 1099-b)

Assume that you wish to convert $100K in mutual funds from Traditional IRAs to Roth IRAs in 1999. Assume also you have eight Traditional IRAs with $50K in each. Why not convert all eight mutual funds from Traditional to Roth IRAs in early 1999 and come April 15,2000 recharacterize the six mutual funds that had the least increase in value? Would not this conversion strategy maximize the value of your 1999 Roth IRA conversion while taxes would only be paid on the $100,000 of the two mutual funds that had increased the most in value prior to tax filing deadline in 2000? Your input is appreciated.

I'm looking for good examples of IPS's for a client?

Any help would be greatly appreciated.

You can just e-mail them to me @ bradbrewer@aristotle.net

I have a client who incorporated mid-1998 from a sole prop. The client wants to continue the plan on behalf of his corporation. Does his Keogh Plan (P/S), a prototype, need to be terminated or can it be amended by restating it as a plan sponsered by a C-corp effective as of the day the business entity is changed? This question seems to come up quite often, but I can find no consistent answer.

Thanks for the help!

Our company has a full flex section 125 cafeteria benefits plan. We are interested in setting up a mass transit benefit pre-tax. I realize that this can not be set up as a flexible spending account in the 125 plan, but would appreciate any information on other ways to set up this benefit for our employees. We do not wish to purchase the transportation passes for employees, we just wish to offer the pre-tax savings as a benefit.

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Betty Taylor

Director of Human Resources

RHD, Inc.

I cannot find specifics about "qualified" deductions for education expenses. I would like to use my Roth IRA funds to help fund my kids' college tuition in 10 years but I can't tell if my kids' education qualifies. A Yahoo! contributor writes: "The expenses must be incurred by one of the following: you, your spouse, your spouse's children, your grandchildren or your spouse's grandchildren". What about MY children?

Are there any inherent advantages or disadvantages of different investment classes (i.e. growth vs. value funds, large vs. small cap funds, bond funds, reits) when used in a Roth vs. a Trad. IRA. Also, are prefered stock funds apropriate in IRA's

(1) As a general rule, are there any benefits to be derived from converting a 401(k) to a traditional IRA?

I'll be getting a share of a 401(k) as part of a divorce settlement. If I were to convert this it would be penalty-free in the context of a QDRO. But it might not make financial sense.

(2) Would there be any long-term benefits to then reconverting the traditional IRA immediately to a Roth IRA? There would certainly be a tax liability on this (going from a tax-deductible to a non-deductible plan), but would this "second" conversion incur a penalty because it is too far removed from the QDRO? I'm thinking that some of the tax liability would have to be paid from these assets (though not all), and this might constitute an "early withdrawal".

I would appreciate any clarification of these two issues.

Thanks!

If a plan sponsor returns any excess contributions by March 15 but does not adjust the returns for any gains/losses is this a valid return? Is the excise tax still due on the excess contributions?

Is the termination of a 457 Plan much the same as the termination of a plan qualified under 401???

Also, can a 457 Plan be frozen, i.e., no more deferrals allowed, and the assets held in the plan distributed as per the terms of the plan???

Any help appreciated,

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Does anyone offer continued health benefits for surviving spouses, other than COBRA? Is there a fee involved? If the employee would have been eligible for post-retirement medical, is the surviving spouse offered continued medical as if the employee had already retired?

Thanks for any help provided.