I need to take an old 401k from a previous employer over to an IRA in order to to keep it drawing interest and to make withdrawals as needed. 

I had taken a 401k loan before leaving the firm and intentionally let the loan default, knowing that I would need to pay tax on the distribution on the very next Income Tax period - which I did. I have a 1099-R that shows the distribution (box 1, Gross Distribution, and box 2a, Taxable Amount both show the same amount), and I have a 1040 (from 2008) which shows that same distribution amount in line 16b, Pensions and Annuities, meaning I paid the tax on that distribution.

The 401k still shows this distribution as a "Loan Investment" along with the investment of the other 401K investments (see attached). Of course there is no money in the "Loan Investment" - the units and price are 0.0 (as opposed to $x,xxx for this and $xx,xxx, etc for other investments).

Do I now need to pay tax on that a SECOND time when the 401K is taken over to the IRA (as the advisor stated)?

Should that defaulted loan even still appear in the old 401k? Is there any way by looking at the chart that the advisor should realize that this loan was defaulted and tax has already been paid on it? I hope to show him my 1099-R and my 1040 tax form to prove the payment was actually made, but that may not fly.

Thanks for any advice anyone has on this matter.

Is there any issue if a plan has immediate eligibility, a 6 year graded match (or any vesting other than 100% after 2 years) and a tiered service match formula as follows:

0-2 YOS – 0% match; 2-5 YOS – 50% match; 5+ YOS – 100% match

The participant is not eligible under the match for any contribution until 2 years of service, but the vesting schedule is not 100% after 2 years of service. Is this permitted? There is no stipulation in the plan document either way.

Thanks!

net plan assets are now below $250K, do i need to continue filing EZ5500?

We have a client with plan year ending 6/30.  We completed valuation work for plan year ending June 30, 2017.  At that time the plan, called Plan A,  both failed the ADP Test and the plan’s assets were merged with another plan, called Plan B,  so that the ending balance on the 2016 Form 5500 for Plan A was reported as  zero and a final return was filed.   Assets merged into Plan B as of 6/30/17. Plan B has a plan year ending 12/31.   

My question has to do with the deadline for returning ADP failures before a one to one QNEC is required. Is the based on old Plan A’s  plan year end or new Plan B’s plan year end?  And if it is based on new Plan’s plan year end, was the deadline 12/31/17 or does it extend to 12/31/18?  In order words, what was/is the final date for making refunds under this scenario?

Does anyone know of an individual or a firm that does project/contract work on Relius daily? It would be a 6-12 month project.

We have asked this question to the PBGC and have not received a response as of yet, so I was hoping someone may have had the same issue resolved.

We have a terminating DB plan with about 60 participants.  One participant was terminated earlier in the year by the plan sponsor after they determined that she was using false identification and a stolen SSN.  Her estimated payout in the plan term is approximately $1200.

She has not obtained a real SSN yet. 

What options does the plan sponsor have with respect to paying this participant her benefit?

Thanks very much.

I apologize in advance if this subject or queation has been asked...

My sister's husband passed away unexpectedly couple months ago. They have been married for 20 years. He divorced his first wife after 15 years of marriage. During the marriage with first wife he was recieving disability. Later determined that he was being overpaid. About 300 was being deducted from his retirement for the repayment. My sister recieves a letter stating she now responsible for the remaining balance that he owes on the overpayment. FF to today she was told that because hia firat wife was married to him for more than 10 years she too is entitled to his benefits. So if she is entitled to his deatb benefits is she responsible for the overpayment as well as my sister? Please someone help me with this.

I have a unique hardship request to prevent eviction. Apparently the lease contract states that the tenant has a limited amount of time to notify the property owner of issues that need repair and if that amount of time expires the tenant is responsible for repairing the dwelling. Now the owner of the property is trying to evict the tenant/participant for neglecting to notify the owner of needed repairs, so the owner is saying pay to have the repairs done or get out. Has anyone ever seen anything like this before? Is this a valid hardship request?

On the surface it is to prevent eviction, but it is also to repair a property that doesn't belong to the participant. 

Any thoughts?

Thanks in advance! 

If a terminating plan has only a forfeiture balance as of the end of the plan year and no active participants, how would you record the participant count?  Ordinarily I would not count the forfeiture account as a participant but am wondering if a participant count of zero would raise a red flag.

We have a QACA plan for a controlled group. One of the participating employers would like to spin off into a different plan in the middle of the plan year. The controlled group status is not changing. They have assured us that the new plan will have identical provisions. (Although I'm skeptical that they won't add something.) The receiving plan is part of a MEP.

Notice 2016-16,  III D 2 is very clear that you can't do a mid-year amendment that reduces the number or group of eligible employees. Our plan would obviously be reducing the group of eligible employees. However, because those employees are continuing to be eligible in a plan sponsored by the same employer with identical provisions, a co-worker believes it would be OK to do. Is that correct?

Regardless of timing, we plan to write the amendment to transfer the balances of the impacted employees to the new plan at the time of the spin off. Going forward, if they have employees who move between companies, I don't believe those employees will have a distributable event in the plan they are leaving. Is there a way to write something into the spin-off amendment to allow the balances to move between plans for transferring employees?

Do we have a benefits rights and features issue due to different investment line ups?

I should know the answer to this, but an accountant just approached me with a client who started a 401K in 2007, hired her sister as a PT employee (yes, under 1,000 hours) and ADP told her she did not need 5500s as the employee was excludable??

Obviously, if the employee is excludable, no 5500s until investment value greater than $250,000.

I believe excludables must be counted.

First time to deal with this, so any help would be great. I've found and read  IRS Memo 201413006 that speaks to this, but it doesn't speak to the case where the employee has terminated employment in the prior year.  

Debit card was charged in plan year 2017 for $159.26.  Participant terminated employment 7/14/17 and received her 2017 W-2 at the beginning of 2018.   Third party FSA admin just notified us  at the end of the claim period and has stated that  they have sent notices and contacted the individual 3 times and suspended the debit card as required by the Memo above.  

But it looks like there were no other claims to offset and there are no future wages in 2018 to offset.   So the $159.26 would become income in 2018, right?  And the employer would just have to eat the both sides (employee and employer) of the (albeit small) FICA/FUTA amounts?  and the former employee would receive a W-2 from the employer for 2018?

Any one have to deal with this in the past that can tell me whether i am going down the correct path or not?

Thanks!

Is the federal tax withholding of 20% mandatory from a 401-k distribution less than $1,000?

Plan has 21 & 12 for PS & SH Match but 3 months for 401k

If the owner gets Profit Sharing does that eliminate the SH/TH exemption for the OE componant plan?

(So the OE employees will need to get TH min is SH is less than 3% of pay)

Thank you

If your DB plan fails 415, is there anyway to correct that failure in a DC plan sponsored by the same sponsored?

Situation is this....

An employee who is a participant in the plan (SH Match 401(k) ) simply doesn't want to play anymore.  He wants to take his money and invest it somewhere else... away from the plan.  There is not a distributable event... not 59-1/2...  not disabled... nothing.   The employee is out of luck... correct?   Money has to stay put.

a 59 year old woman currently has a traditional IRA and is interested in converting to one ROTH or a few ROTHS.  Due to her age, would this be advisable?  If so, would multiple ROTHS be necessary?

I have a situation where a client recently deceased & has her estate as beneficiary of her IRA.

Her will created a trust for estate assets. Since the trust is the beneficiary of the estate which will receive the IRA funds, can the beneficiaries of the trust be considered as designated beneficiaries for IRA RMD purposes?

To satisfy the requirement to post 5500 information to the plan sponsor intranet, does that require the actual Form 5500 AND the SAR to be posted, just the 5500, or just the SAR?

Thanks very much.

Can a 1 participant plan (or just the Trust) continue after the death of the sole participant?