How is the match contribution determined for self-employed/partners participants in a 401(k) Plan? It is now permitted, but is it possible in a plan that provides for (1) elective deferrals, (2) a match equal to 50% of the elective deferral up to a maximum of 4% of compensation (earnings) and (3) a discretionary profit sharing contribution?

[This message has been edited by GeorgeK (edited 03-17-99).]

Will someone please check my math. In determining the GATT applicable interest rate to be used for ex. Jan. 1, 1999, we use the Dec. '98 30 Yr rate. Looking back two months (no grandfathering req.), we would be using the Oct. '98 30 Yr rate, and looking back 5 months (garndfathering req.) we would be using the July '98 30 Yr rate. Correct, or have I went back one month too far?

Thanks gentlemen, I'll give it a try.

In 1996, various divisions of a large Co. were sold off. Employees had the option to retire under the old Co. but continue working for new Co. but getting 2% more as Co. 401k % instead of any pension. $13 Mil was given to new Co. for remaining employees (205 people) and new Co. would still contribute to their pension. New Co. now wants to buy-out the remaining people with pension fund (now $16+ Mil) but they 307 people are elegiable (the other people who already received their pension from the old Co. and some of the people from the new Co. who never worked for the old Co. are getting some of this also). what can we do??? PLEASE ADVISE!!! GREGG

I lost my job last year and rolled my 403(B) funds into a Roth. I have since found a new job and our MAGI exceeds $100k. Do I have to do a recharacterzation to a traditional IRA and wait until they increase the MAGI to qualify? How do I handle the gains? And is the $2000 contribution I made to the Roth deductable?

We currently provide eight weeks paid Maternity Leave (for child care purposes -- disability and heath verification is not required) to female staff members. Don't we also have to provide the same benefit to males (paternity leave)? The paid "maternity leave" runs concurrent with FMLA. Males who utilze FMLA to care for a new child are not paid for the first eight weeks as are females. Thank you.

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Have had traditional ira self-directed with stock that has split many time. Is the cost basis simply the $2,000 initial investment and all the value of the stock (splits) above that taxabel?

I am looking for IRS Ruling 72T Substantially Equal Payment information on the net. I have searched for hours in vain. Would anyone be willing to share resource locations for this ruling? I am specifically looking for a copy of the ruling and resources of firms or institutions who may perform these calculations. Thanks.

Is anyone aware of the IRS tax laws regarding the Section 129 participation ($5K pre-tax) of an employee who is now divorced and a noncustodial parent? This staff person knows that they can claim the exemption for the child based on their divorce decree..., But, are there different rules that apply in determining the child as a *qualifying* person in this instance vs. when someone simply wants to use the dependent child care tax credit on their taxes? (up to $4800)

I have read the IRS Publication 503 (page 4) -- and it is not clear to me. We have called the IRS and they gave us a number for the IRS in Wash DC who deals with cafeteria plans.

Any help would be appreciated.

Thanks,

AMB

We currently file approximately 350 5500s annually. A local soft ware company is developing a product for electronic filing of the 5500. We have been asked to provide a sample of various 5500s with schedules for testing purposes. Names and ID #s would be removed. Does anyone see any legal issues here? Once filed, 5500s are part of the public domain anyway. Just thought I would check.

Is there any other reason that someone would be eligible to defer their RMD OTHER than the fact that they are still employed and not a 5% owner?

I am currently in the process of doing research on what most employers are considering fulltime work weeks. I work for a regional CPA firm and we consider 37.5 hours per week full time in order to be eligible for benefits. Does anyone have any surveys or other information regarding this, or would like to share their policy with me. I am having a very difficult time finding any information regarding this. Thank you in advance.

I am changing the form of a plan from an ESOP to a profit sharing plan. I anticipate that, shortly thereafter, the company stock will no longer be readily tradable on an established securities market. Currently the stock is publicly traded on the NYSE.

When the stock becomes no longer readily tradable, must I include a put option in the profit sharing plan thereby preserving what would have otherwise been required to be done if the plan were still an ESOP? Alternatively, can I eliminate in-kind distributions once the stock becomes not readily tradable as I would be able to do if the plan were still an ESOP under the ESOP and stock bonus plan exceptions of the 1.411(d)-4 regulations? If so, how do the limitations of the ESOP investment requirement of 1.411(d)-4 Q&A 2 come into play once I change the plan to a profit sharing plan?

If an employee is part time (working 25 hours a week) and not eligible for health benefits but otherwise a regular employee and all full time employees performing the same work in the same divison are entitled to 401(k) benifits is the part time employee also entitled to benefits?

ARE YOU AWARE OF ANY COMPANIES IN CHILD CARE OR YOUTH PROGRAM INDUSTRY THAT HAVE FORMED AN ESOP OR STOCK OWNERSHIP PLAN? I AM INTERESTED IN THE SUCCESSES, ROADBLOCKS, LESSONS LEARNED.

Based on the current 415©(3) definition of compensation (i.e., adding back in deferrals), can someone confirm that you cannot back out 457(B) or (f) deferrals to bring someone below $80,000.

It is typical in an S Corporation and now in LLCs for the owner to take a W2 salary from the corporation, "leave some money" in the corporation at the end of the year, and this amount is included on his 1040 as a corporate distribution or dividend (I'm not sure of the exact term).

Does this "corporate distribution or dividend" count for various definitions of compensation which affect retirement plans.

For example:

Assume the owner's W2 is $25,000 and his "dividend" is $20,000. (Use higher numbers if you would like.)

1. For the 415 limit on DC and DC plans, do we use a pay of $25,000 or $45,000?

2. For the compensaton used in the denominator of the 401(a)(4) tests, do we use $25,000 or $45,000?

3. For the compensation used in the denominator of the ADP/ACP test in a 401(k) plan, do we use $25,000 (plus his deferral)or $45,000 (plus his deferral)?

4. For testing in a 401(k) plan against the 25% of pay limit, do we use $25,000 (plus his deferral) or $45,000 (plus his deferral)?

5. For determining the 15% of compensation company-wide profit sharing contribution limit, do we use $25,000 or $45,000?

If we define "compensation" in the plan to include this "corporate distribution or dividend", does this help?

Does it make a difference whether the company is an S Corporation or an LLC?

Does anyone know of any authority aside from the Cotter and Canseco cases that address whether a DB plan must make retroactive payments (or an actuarial adjustment to future payments) to a participant who does not file a claim for his pension for say 2 years after his initial eligibility for his pension at age 65? In other words, does he get payments (or actuarial credit) for the period of time he was eligible but had yet to file his claim, or does he just lose those payments? Any thoughts on this issue would be greatly appreciated.

Thanks.

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Adam Stone

A's only business is the performance of management functions for B. A (which has one HCE and no NHCEs) is not related to B which has dozens of NHCEs). This is a management ASG under 414(m)(5). In order to avoid ASG status, A begins performing management functions for C, a wholly owned subsidiary of A which is also not related to B. Assuming that the services performed for C are legitimate and that they represent a sufficiently high percentage (whatever that may be) of A's revenues, it appears that A and B will not be a management ASG because A will not perform such functions for (1) one organization (since it does so for B and C) or (2) one organization and others related to the one organization (since B and C are not related). In effect, A can end run 414(m)(5) by creating a second customer for its services. The proposed regs might have stopped this maneuver, but have been withdrawn. Am I missing something?

I'd like the thoughts of our esteemed reader group on when do you considere a contribution to actually be made.

This affects two areas. For contributions made near the tax filing deadline (plus extensions), is it deductible for the prior year. And, for defined benefit plans, what date does the actuary put on the Schedule B.

Several possibilities that I could think of:

1. The client wire transfers the contribution on date X and it is posted on date X. (duh, this is simple).

2A. The client dates the check as date X, gives the check to the broker on date Y (Y usually equal to X), and it appears on the brokerage statement (i.e., the broker posts the check) on date Z.

3A. The client dates the check as date X, mails the check to the broker on date Y (Y usually equal to X), and it appears on the brokerages statement (i.e., the broker posts the check) on date Z.

2B. Same as 2A except substitute "bank"

for broker.

3B. Same as 3A except subsitute "bank" for broker.

Thanks