If a plan requires a participant to be employed on the last day of the quarter in order to recieve a matching contribution, how does this effect 410(B) testing with respect to the 401(m) piece. For example, if an employee is employeed on the last day of the first quarter and recieves a match, but terminates in the middle of the second quarter, does he or she benefit under the plan for the purposes of 410(B)?

I am looking for some help in putting together a sample Compensation Package in Proposal form to submit to an employer for a possible position. They want me to submit to them my requests (salary, bonus, etc.) and I'm looking for some samples or ideas.

Thanks

[This message has been edited by JimBob (edited 12-28-98).]

Does anybody know how the IRS treats converion of the basis from a regular IRA to a Roth IRA. Assume 20% of my IRA is listed as an already taxed basis.

Can I take that basis out directly? Or is there a FIFO, LIFO, lind of problem?

In response to numerous personal mail messages....

A SEP is not a "successor" defined contribution plan for the purposes of Code Section 401(k)(10)(A)(i). The purpose of that section is to prevent participants from gaining premature access to their funds. Requiring transfer into a SEP would accomplish nothing. This position is supported by the regulations under that Code Section. The same rational would apply to a SIMPLE IRA. Furthermore, a SIMPLE IRA plan may not accept rollovers from a qualified plan. In the case of a SIMPLE, the only contributions that are permitted are contributions (i) under a qualified salary reduction arrangement, and (ii)rollovers or transfers from other SIMPLE IRAs (UNLESS subject to the two year restriction, see IRC 408(d)(3)(G)).

I have a 401(k) profit sharing plan that vests the match at 100% and the p/s contribution under the 6 yr schedule. The plan is not top-heavy. The sponsor is changing the p/s vesting to a 5 year cliff. Does anyone have a sample participant notice and election form? Thanks.

I converted my traditional IRA's to Roths's. I have been told that I can no longer contribute to those accounts and that I need to open new, contributory Roth IRA's.

I was told recently that a new modification to the law now allows contributions to the the conversion roth.

Can anyone confirm (with any details)?

Earlier this year, I worked hard to keep my AGI under $100,000 so I could qualify for a Roth and convert my traditional IRA to Roth. I have done so.

This week I learned that a SEP can also be converted to a Roth (no thanks to my Financial Advisor at a big brokerage that shall remain nameless but whose initials are ML).

My question is this. I made a $9000 contribution to my SEP this tax year. That comes off the top of my self-employed income on Schedule C. Ergo, my AGI stays below $95K for tax year 1998.

If I convert the SEP to a Roth, can I still deduct the $9000 on schedule C; recognizing of course that taxes will be due on the lump sum disbursement of the SEP?

For a traditional IRA, which is an adjustment to income on the front of the 1040 form, conversion to a Roth means that the deduction may not be made.

In the case of Schedule C, contribution to a retirement account might still be considered a business expense.

The Catch-22 in all this is that: if the SEP contribution is NOT deductible as a business expense, then my MAGI will be above the allowable $100k limit.

Another question: How about if I don't convert my entire SEP to a Roth? Any way I can avoid increasing my MAGI that way?

Advice would be greatly appreciated. I have scoured the web, IRS instruction, etc. and can find support to argue both ways.

Can a person receive creditable coverage and still be a participant in the plan. For example, John and Mary are married and Mary has participated in John's employer's plan for 2 years. Mary gets a job and the questions is: Does the 2 years of coverage under John's employer's plan count towards the pre-existing condition limitation in Mary's employer's plan even though Mary continues to be covered under John's employer's plan?

I have a client who is a Subchapter S Corporation. There are two shareholders, both of whom draw a salary. They would like to have a flexible spending plan so that they can pay for out of pocket childcare and medical expenses with pretax dollars. There will eventually be nonowner employers. But for the present, can these two shareholder employees, both of whom own more that 2% of the corporation, have flexible spending accounts without running afoul of discrimination rules and subchapter S rules?

I contributed $2k to Roth IRA in Jan. Now our AGI is over $160, I am not eligiable to contribute to Roth IRA. Can I rollover to regular IRA? As my Roth IRA is a stock account. I used $2k to buy stocks which are appreciated to $4k. Can I rollover the stock to regular IRA account or I have to sell my stock and only contribute $2k to regular IRA and pay tax and 10% penaty for the amount over $2K? Any advices are great appreciated.

Is it possible to convert the Manditory Distribution at 701/2 and after, from a regular IRA to the Roth after the taxes are paid. Example if the manditory distribution is say $15,000 pay the tax and roll this into a Roth, and do so for each year that follows.

May an employer exclude from participation in a 403(B) Plan employees that do not work 20 or more hours a week? I have read commentary recently that indicates this may be permissable. However, the commentary does not provide a cite for this information. In addition, the author is not clear on whether he is speaking of salary reduction or match money or what type of 403(B) plan. Insight on the authors source and the plan and money types to which it applies would be appreciated.

Is there an average for participation in 401(k) plans? Is there anywhere I can find this info?

I realize the sooner I start putting the max. in each year the more tax free earnings I will have over time. However I am already investing in several areas including 401k and a brokerage acct. Do I need to rush and open a Roth this year or can it wait. If I do open a Roth before Dec 31st 1998 can I split up the tax cost of conversion over 4years when I rollover my 401k in 2003?

[This message has been edited by joeblues (edited 12-24-98).]

Can an investment company charge IRAs with small accounts ($500 or less) an annual fee without imposing an annual fee on larger accounts? Cite would be helpful.

christine, a rastafarian rabbi trust is simply a rabbi trust that is offshore (out of the united states). The theory is that being out of the united states provides an added layer of protection even against bankruptcy. Not really clear if it works or whether the IRS thinks it works, but I think that's the general concept.

Trying to evaluate advantages to establishing one or the other. Anybody seen an article or have some info. to share?

Thx,

Webster

Can I transfer stock in amount of $500. to a Roth Educational IRA for a grandchild?

I recently converted a traditional IRA to a Roth IRA. A broker is the current custodian of this account. I have some shares of stock that I have purchased through a couple of different DRIP programs, and also some shares of mutual funds I've purchased through the years through no-load companies. All of these securities are held in regular, taxable accounts. I am trying to determine if it is possible to transfer any of these securities into my newly converted Roth. Is my only option to liquidate these accounts and transfer the cash to the Roth?

We have less than 100 employees and recently changed insurance plans. The new plan has less counseling benefits than the previous plan and we have had someone under constant care for a long period of time. My question is there any way to provide the difference in benefits (approximately $4000/yr) to the employee without tax.