I have a potential client with the following facts:

Person A owns 73.33% 

Person B owns 16.66%

The remaining 10% is owned by a trust. The Trust is an irrevocable trust where Person A is the grantor and Person A's children (ages 25 & 27)  are the beneficiaries. Person A's brother is the trustee of the trust. The children are set to receive 1/3 of the benefit at age 30, 1/2 at age 35 and the rest at age 40.

I am trying to figure out if the children's benefit in the trust should be attributed to Person A, creating a controlled group with a separate company person A owns 100%.

Any help would be greatly appreciated.

Are individual states required to comply with the relief enacted under the Cares Act with regards to waived 2020 RMDs, Aug 31st due date for rollovers, & one IRA rollover per year exemption?

I was told NYS is not following the Cares Act & was asked how to handle RMDs that were taken during 2020 & then rolled over into IRAs after 60-days for state tax purposes.

Wouldn't it be based on how the states define eligible rollovers & if they cite the federal code & regulations?

How is a Family Limited Partnership (FLP) considered for controlled group rules? Specifically, when multiple companies are involved and individuals own portions of some of the companies (perhaps constituting a brother-sister controlled group or combined via ASG rules) and then the same individuals own other companies but only through an FLP. 

I'm new to this and I heard that when people leave a company, they tend to leave their 401k behind. Is it a big problem for the employer to keep all those orphaned 401k's? If so, how should we encourage people to rollover their 401k when they leave? Thanks!

Is it clear that a plan loan "deemed distribution" (as opposed to a "loan offset") cannot be treated as a CRD by a CARES Act qualified individual? 

Employee participates in Plan A for part of 2020 and contributes the maximum of $19,500 employee Roth Contributions. Employee terminates service and moves to a different company where he/she is immediately eligible to participant in Plan B (there is NO controlled group between the two entities). Plan B permits after-tax voluntary employee contributions. No employer contributions are allocated in Plan B. Can the employee deposit a maximum of $57,000 as an after-tax voluntary contribution?

I believe the employee contribution is a calendar year limit (maximum of 19,500), but is the after-tax voluntary contributions subject to the 415 limit which is a Plan limit?

Is it clear that a plan loan "deemed distribution" (as opposed to a "loan offset") cannot be treated as a CRD by a CARES Act qualified individual? 

So I'm just curious, not being even remotely tech-savvy by today's standards. Let's say you (plan sponsor, and/or recordkeeper/TPA in conjunction with plan sponsor) decide to avail yourself of these new regs. Does it open up big potential holes for a breach of security, when a gazillion participants are receiving e-mails stating that their statements are available, and providing a hyperlink or instructions, etc. on how to access them? A lot of participants have internet access that isn't as secure as perhaps what they have at work, and it may be easier for passwords to get stolen, ghosted, whatever?

It just seems like in a general way, the more things are done via internet-based applications, the more potential security breaches come into play. Just wondering what folks think about this aspect, entirely aside from whether the process is better/worse/indifferent from an administration viewpoint.

Are governmental defined contributions plans subject to the 6-year restatement period? If so, are their restatements due the same time as 401(k), profit sharing and money purchase deadline of 7/31/2022? 

Calendar year plan, employee is hired during the last week of 2019.  However, the first paycheck they receive isn't until the first week of 2020 (and counts on the 2020 W-2).  Does the universal availability clause require that the participant be counted as a participant in 2019, even though there is no official 2019 compensation?  And this plan has an ACP Test - I would say that the participant had no opportunity to receive a match and therefore can't be counted in the 2019 ACP Test... but I would have to include them in a coverage test.  I don't really have a basis for that (yet), but it seems ridiculous to include someone in a test that they had no opportunity to take advantage of (hmm, so then why include them in 410(b) testing?).  Any sage advice?  Thanks.

when is a plan actually considered disqualified?  does the IRS have to formerly disqualify before it is considered disqualified? i know the IRS can reach back to open years but was wondering how the SOL applies to plans that might not be qualified due to failures (but not formerly disqualified by the IRS)

https://www.businessofbenefits.com/2020/08/articles/403b/are-there-partial-terminations-of-403b-plans/

The information in this article, while interesting (and I didn't bother to evaluate it), makes no difference to us, as our plans provide for 100% vesting upon full or partial termination anyway. I expect most plans do...

I just realized that my previous employer didn't pay most of my payroll deductions or the company match for 9 years into my account.  I don't even know where to begin getting my money back.  Can someone help?   

An attorney has a P.C. (100% owed). he also owns 50% of a CPA firm with which he is associated. No doubt, this is an A-Org/FSO ASG. Sometime in 2020 he sells his interest in the CPA firm. He still works there, but is no longer an owner.

Does this break the ASG in 2020? When do we make that determination? First day of the year? Last day of the year? Any day of the year? I don't see any guidance on this. If this were a controlled group issue, does the determination date differ? 

Hi

I was asked the following:

401k plan effective 2017 but no deferrals were made nor any other contributions i.e. bunch of participants (owners + rank&file) as of 12/31/17 but no assets.

2018 had deferrals and other contributions.

Same for 2019.

Client sends data for the first time since inception, last week.

They had to file 5500 for 2017, correct?

2018 they did not.

DVFC for 2017 and 2018, correct?

Thank you,

Plan allows for two loans at a time.  Participant has one loan outstanding and qualifies under COVID to both suspend on the existing as well as take out a new loan, the total of the two not to exceed $100K.

Is the $100K offset by the outstanding balance of the existing loan?

Hi all,

I am looking for a used copy of the DC-1 and DC-2 Study Guide materials from ASPPA. Any suggestions or is that allowed? 

Thanks!

Client acquired another practice in 2016.  They did not give credit for prior service with prior employer for purposes of vesting, etc.  Three doctors attained NRA (which is age 55 in this plan) during their employment with Client.   However, all of them worked less than 5 years before either retiring, quitting, etc.  Would they still be 100% since they met NRA while employed? Plan document just has checked "specific age"  age 55 - doesn't have the age/participation box checked.  So I am just asking if you agree that they would be 100% based on that?  It's a LOT of money as they fund their Profit Sharing every year.  Thanks!

A plan moved from a 3% nonelective safe harbor prior to 2019 to a basic safe harbor match for 2019.  Through some miscommunication with payroll they continued to allocate a 3% nonelective during 2019, so some participants received too much safe harbor and some not enough.  The net effect is an overcontribution to the Plan as the participants who received too much exceeded the participants that need more.

There are two participants who received too much who took distributions before the error was realized.  One took a distribution in 2019 and one in 2020.

The amounts are not huge, $500 for the 2019 distribution and $1500 for the 2020 distribution.  

Since the plan sponsor already has an excess in the Plan they would like to use some of the excess to treat the ineligible distributions as non-recoverable from the participants.

Am I correct, however, that in both cases the participants need to be informed that the ineligible portion of their distributions were not eligible for rollover and must contact their new custodians to distribute the ineligible amount plus earnings, corrected 1099s will need to be completed, and in the case of the 2019 distribution, the participant will most likely need to amend their tax return?

I was trying to think of a way in which the contributions could be considered as actual contributions for these two non-highly compensated employees to avoid further correction.  The Plan does allow for profit sharing in which each ee is their own allocation class, but also requires last day of employment (which disqualifies the 2019 distribution ee), and the 2020 distribution ee would not be fully vested in profit sharing.

Thank you.