I have been searching for a forum such as this for several months.  I have read some of the threads which have been very helpful.

If I can please provide a short summary, than a list of questions.  Last Spring, I was terminated from a very successful ESOP company that is 100% employee owned.  I worked for the company for over 26 years and held the position of VP.  I was one of the 5 top share holders of the company.   I ran afoul of the company President and CFO when I questioned (when I was asked to sell back shares due to the top heavy rule) the low price of the ESOP shares that I would be paid a few years back and the same situation was to occur in 2019 also.   Some numbers to justify why I question the value:  The ESOP shares, approximately 40 participants, have a total book value of $10 million.  Recent five year sales for the company between $58 - $65 million and there are $10 million + in assets alone if liquidated.  Net profit 15% minimum prior to reinvestment and bonuses annually.

Any help with the following questions would be appreciated:

*  I received as statement indicating how many shares I owned and a dollar amount per share.  What can I do to find out how the shares are valued or have them checked by others?  What rights does an employee have?

* Is it standard / acceptable for the President and the CFO to run the company and the ESOP?  There is no board of directors.  Taking very high annual bonuses and controlling the ESOP seems to be a conflict of interest.

*There is a third party appraiser, but I'm sure they were asked to keep the value low.  

*There is more to the termination in regards to questioning the ESOP direction, are the ERISA employee rights for retaliation termination.  I did not ask a question that I did not feel was permissible per the plan document.

* Are there law firms that are knowledgeable to represent the employee in ESOP disputes.  

I am in an at will state and have met with an attorney, but I am finding out he has very little knowledge of ESOPs.  I'm ready to reach out to the DOL, but would like to educate myself as much as possible before that.  

Thanks for your help.

I have a new company with 111 participants at the beginning of the year.  Can they file as a small filer?

CARES Act says tax is ratable over three years. lets say he pays back the distribution in year 3. what happens to the tax paid?  

We have a plan that had a partial plan termination in 2019 because 20% or more of the employees were involuntarily terminated. My understanding is that anyone who was terminated in 2019 (whether or not it was involuntarily) should become 100% vested. However, what if there are a few of these affected participants who already took a distribution (that was not 100% vested) from the plan? Should the amounts they forfeited be restored?

Corporation A has no Plan, and buys Corporation B which has a 401(k) in a stock purchase. Corporation A wants to keep the plan. What is the simple list way for them to do that? Change plan name and tax ID?

Thanks

So the legislation doesn't count a participant as an "eligible" participant if the participant's SPOUSE gets laid off due to Covid-related employer financial issues at the spouse's employer. I'm guessing the odds are  that Treasury will add this situation to the list of "other factors" to be determined? Anyone heard anything on this? I'd rather expect that there will unfortunately be a huge number of such situations.

What do you think about the following statement?

“Individuals who continue to work full-time on a reduced salary are not eligible.” 

So if I have a self-employed individual that has the ability to work full-time, but can't drum up the work for obvious reasons, can't take a distribution for adverse financial reasons.

I didn't make this up.

Thoughts?

If a wife takes a loan from a 401k plan and passes away before it is paid off, can the husband pay off the loan before the end of the quarter following her passing? Or is it automatically defaulted?

A Client's wife inherited an IRA from her mother in 2017. The wife passed in 2020, so now the husband is the beneficiary of the Inherited IRA. Ignoring the waiving of RMDs for 2020 due to the virus, does the SECURE act now apply and does the husband have to take the full balance out within 10 years?

I know there was an extension in funding an IRA with the due date of tax returns being pushed back until July 15.  I haven't seen anything that states the same is true for Employer Contributions for the 2019 Plan Year.  Has there been any clarification on that?

Thanks as always!

Hi

Looking at a 2018 k-1 for a takeover plan (partnership and each partner is making the same amount). I am not sure if I am providing enough information but something does not seem right, at least to me.

K-1 line 14 is 125,000 (same as line 1 - ordinary business income)

Partner pension deduction is 25,000

Partner employee portion deduction is 1,000

Partner health insurance deduction 15,000

The amount subject to self employment tax was calculated based on 85,000 (125k less 25k less 15k)

My approach to calculate the amount subject to self employment tax would be 124,000 (125k less1k - employee portion)

What am I missing here? Your comments are appreciated.

Thank you

Since Many/all are working remotely will the fye 6/19 5500s that were on extension until 4/15 be included in the new extension?  It's hard to understand if it is not further extended. Thank you.

Participant elects flat dollar amount to be withheld from paycheck.  Pay amount for this pay period is less than the election amount.  Should the election be ignored or 100% less tax withholding be withheld?  The document, deferral procedure and enrollment form are all silent on the issue.

Thanks for any guidance.

Do you think it was intentional or an oversight that the criteria for a qualified individual includes reduced work hours, but not reduced compensation?

If a salaried employee is required to work the same number of hours at a reduced salary are they out of luck to be considered a qualified individual?

Thanks.

The CARES Act says that minimum required contributions due in 2020 can be delayed until 1/1/21.  If a calendar year DB plan has a 2019 MRC of $40k due and a maximum allowable contribution of $200k and the employer wants to contribute $100k, a literal interpretation of the Act could imply that $60k would still be due by 9/15/20 while only the $40k MRC can be delayed until 1/1/21.  In other words, the seemingly unintended effect would be that an amount greater than the MRC would be due by 9/15.  Should the new rules be taken to mean that the whole contribution can be deposited by 1/1/21 even if it exceeds the minimum required amount?

Can someone confirm that a FICA Alternative Plan functioning under a 457 or 403(b) plan is covered under the CARES Act. 

Hi there, we are having a debate about the repayments of COVID distributions back into the plan, and if they should be coded as normal (pre-tax) or as after-tax.  I understand that ROTH has to be accounted for separately.  I believe that since the repayments offset the tax burden, the monies become pre-tax once again.  I can't find anything specific on this, so I thought I'd come to this forum for guidance.  Thanks in advance!

I was drafting a Coronavirus-related distribution application form, which included the certification that the applicant is an eligible individual. The question I have is since the employee has to represent that s/he has been diagnosed with Coronavirus, that a spouse or dependent child has or that s/he has experienced adverse financial consequences, the first two trad awfully close to HIPAA protected health information. Fortunately, this client has a TPA that will be administering this provision (as well as other facets of the plan). The question that I have is does the possible application of the first two grounds of qualifying for a coronavirus-related distribution subject the plan to all the HIPAA privacy requirements? I would like to hear your thoughts on this.

I am confused two sites I use have different answers to the same question.  It is in regard to if I can extend a participants loan past 5 years because of the CARES Act.   Here are the excerpts from their websites:

Website 1)  However, a participant with an outstanding plan loan who is placed on an unpaid leave of absence may forego making loan payments during the leave of absence without triggering taxation of the loan, provided the following requirements are met:

1. The unpaid leave of absence does not exceed one year.
2. The loan must still be repaid by the end of the original term of the loan. Thus, the participant may make up the missed loan repayments upon returning to work, resume the original repayments with a lump sum payment of the missed repayments at the end of the term, or increase the amount of each repayment for the remainder of the repayment period upon returning to work.

Website 2)  Any participant loan payments due from Qualifying Individuals between March 27, 2020 and December 31, 2020 can be delayed for up to one year. If this one-year delay applies, the normal five-year maximum repayment term is extended to six years

See my confusion, one says must be repaid by the original term of the loan and the other says I can change a 5 year loan into a 6 year loan.

Can anyone clarify for me?

Thanks.

Has anyone received formal guidance on calculating  Self funded health plan cost for the PPP application? I know you have to back out employee contributions.

The banker indicates it has to be on a cash basis; so if true, that would rule out a few methods. Haven’t seen any guidance yet. Carrier has not advised yet either.