Can a one-man (non-ERISA) qualified plan invest in a rental property located outside the U.S.?

Student health insurance at my university is in a confusing situation, and I hope someone here can help.

Since the mid-2000's, graduate students who either work 20+ hours per week or receive a fellowship of $10k+ for the year have been required to purchase a student health insurance policy. Currently, that policy is a $250 deductible and 80/20 coinsurance up to the out of pocket maximum ($6k or so).

However, premiums have recently risen (insurance company cites the Affordable Care Act), and so student representatives pushed to have a second insurance plan offered. A high deductible plan ($1500) that also enables students to open and contribute to their own health savings accounts.

However, even after a couple students signed up on the plan, our Grad School decided they don't like the HDHP/HSA option. They decided not to advertise the plan further, and to not allow any advisor to subsidize it. The Grad School says that if students want the HDHP/HSA, they must request a paper application from our Health Center and ask their advisors to increase their salaries as an indirect health insurance subsidy.

The Grad School administrators also say they are afraid of a $100/day IRS penalty if they subsidize the HDHP/HSA plan. The plan was created and offered through the university, so I don't think that is a correct fear, but I'm not sure. Would they be penalized for subsidizing a second plan?

Can they pay 80% of students' premiums on the low deductible plan, but 0% for students on the high deductible plan? And can they encourage students to request a "subsidy" through a salary increase? This seems to allow students to take the salary increase, then sign up for the university's low deductible plan -- in a sense, getting twice the benefit (though no HSA).

Your thoughts are appreciated. I was referred to you all by a financial forum I trust, and as a student would really appreciate your insights.

Witht the new tax law that was passed recently, would the 70.5 RMD section where someone is allowed to make a tax free required distribution from IRAs to a qualified charitable organization apply to 401k plans as well?

Is it possible that there are no interim amendments

since the cycle E EGTRRA submission?

I think the final 415, PPA , Heart and WRERA amendments were included

in the EGTRRA document.

Does anyone recall if this is so?

Thanks

To begin with I want you to know that for the last 48 hours I have been in an ER room with my daughter, so my attitude is bad. I have had 1 1/2 hours of sleep. (She is now fine.)

I had a prospect for a DB plan (she presently has a solo 401(k) plan) because she wants to put away more. I can design a DB plan for her to put away 192% of compensation.

When I asked her for her earnings (W-2) and what she was contributing to her 401(k) plan, her answers first showed she was contributing more than 415 limits and, of course her CPA was deducting more than 25% of eligible compensation for the employer portion.

When I pointed this out, she said her CPA of 25 years set up the plan and for me to "F" off. I replied "Merry Christmas"

I feel vindictive, is there a way to let the IRS know and get her plan audited? She is cheating on her taxes and we all pay for it.

I really just want to vent. Thx for your time.

This is an interesting situation. A 403(b) plan sponsor has three vendors and no central record-keeping. Transfers among vendors are processed by accessing the vendors' web sites.

One participant who believed he had an immediate right to "his" money (salary deferrals only) applied for a direct transfer, but directed the check to his IRA instead of to the plan. He then transferred the funds out of the IRA, much of it after he was notified that he was not entitled to a distribution and asked to restore the funds. He is adamant that he is within his rights and that his attorney has told him that he is in the clear. (He is actively employed, under age 59 1/2 and did not request a hardship withdrawal.)

Sponsor has consulted ERISA attorney. Both the plan sponsor and the receiving vendor have explained the distribution rules and requested in writing that the funds be restored to the plan. They do not expect he will comply.

So, this is what I think happens.

1. Plan sponsor takes a good look at their processes for handling transfers!

2. Paying vendor reports this as a premature distribution since the instructions on the transfer request included the IRA account number and the plan never received the funds. 10% excise tax and income tax results.

3. Receiving vendor reports this as a premature distribution from the IRA, also resulting in a 10% excise tax and income taxation.

20% total excise tax AND income tax on the same money twice? Technically, funds were probably not eligible for rollover--does that make yet another penalty?

I'd enjoy talking to the lawyer who [allegedly] told participant this was OK.

We just discovered an operational error in our Nonqualified Savings Plan (NQSP) that goes back to when 409A was first effective.

Given that you can only correct errors under the 2008-113 correction procedure going back a couple years, does it even make sense to do that. If a participant is corrected for 2015 and 2014 but still has amount deferred in 2010, wouldn't all the deferrals (even 2015 and 2014) be subject to the penalty?

If we terminate the NQSP now and wait a few years, can we wait a certain amount of time and start a new NQSP or will it be aggregated with the current NQSP? Will they be aggregated as long as they both exist even if one has been frozen for years?

I understand IRS audits generally only go back 3 years. If that's true, is it really only the last three years of contributions that are at risk for penalty? If I freeze the plan now and make it 3 years without getting caught, am I generally in the clear?

I am the TPA for an audit level plan that is making me question everything I thought I knew. And it seems to be a real comedy of errors.

The plan sponsor's payroll company cut off employee deferrals when employees reached the compensation limit, even if they weren't up to the 402(g) limit yet. When an employee challenged this, we instructed them to restart the deferrals and that they would need to make a corrective contribution. The client figured a QNEC on their own and deposited it before the end of the year.

The auditor is now requiring them to correct all prior years when this happened, before they will release the audit. They instructed that the 5500 be filed with a statement explaining why there was no audit attached. The client has since received a letter giving them 45 days to produce the audit.

The client contacted an attorney for advice before filing the incomplete 5500. Although he says he has 30 years experience as an ERISA attorney and was a CPA who handled plan audits before that, he says he has never heard of allowing deferrals after the compensation limit has been reached. Question 1: Am I crazy, or is the attorney?

He also advised that because of the QNEC deposit before the end of the year, the client has interpreted their plan provisions to be that the stopping of deferrals was wrong. To correct all the prior years requires a VCP filing. However, because the only people who are potentially due corrections are HCEs, he expects the government to deny the proposed correction.

Back to the CPA, who wants to show receivables for all the prior years on the Schedule H. She also wants to show a negative receivable for the years that might not be deposited, if the attorney is correct. Question 2: Am I crazy, or is the accountant?

Question 3: Is this likely to be the new level of "attention to detail" that is common from accountants as a result of DOL's recent communications about audit quality?

Here are the things I see that I need to watch.

Most of the real estate investors seem to have an LLC taxed as a sole Prop.

1. UBTI

2. Self dealing

3. Arms length transactions

4. Recurring contributions- Should I use a Money Purchase Plan?

Is there anything else I need to watch out for?

Is there a requirement that the owner of the business sponsoring the Plan, have income of some sort?

We have a retiree above 415 limit by $200 on a Single Life Annuity(SLA) basis

He wants 50% J&S option and that is under the 415 limit but do we need to apply the J&S factor to capped SLA

The 50% J&S benefit comes with a pop-up feature but this is the actuarail equivalent of SLA so I assume no further adjustment to 415 limit

Our plan right now doesn't increase the benefit to retirees when the 415 limit increases. Can we amend our plan now

does anyone have info on 415(m) excess plans? are they subject to FICA?

Happy Holidays!

An on-going governmental money purchase plan with a match wants to allow participants to elect 0% - 100% 414(h) pick-up of their final paycheck. The final paycheck will include accrued sick and vacation pay, which can be a large sum. It looks like they are trying to circumvent a CODA by calling the election a 414(h) pick-up. Can this be done? If yes, can you please provide a cite or PLR.

Thanks!

We have a spouse that wants to rollover the assets of his deceased wife. They are both participants in the plan. He will simple roll her balance into his balance inside the plan. Is this considered a rollover or transfer? Would you do a 1099R? I am assuming this is allowed. The dark matter in my brain is saying their was a Q/A at an ASPPA conference in years past, but I can't find it.

Employee/husband takes valid in-service distribution from 401k plan and rolls it over to a qualified IRA. At time of rollover employee/husband is age 73. Original IRA application names husband and wife as joint owners and joint annuitants. A month after the rollover contribution is made, the IRA is changed through a written amendment to remove the wife as a joint owner. Three years later the husband dies and wife "takes over" as new IRA owner (pursuant to terms of the IRA) and receives the annuity payments. She is now filing bankruptcy and claiming the IRA as exempt property.

I have been unable to find any information on whether the qualified status of the IRA should be questioned because there were "joint owners" when the IRA was opened and the rollover contribution made. Does the later amendment "save" the qualified status?

Also, I have found information on IRS website stating that individuals over age 70 1/2 cannot make traditional contributions to a qualified IRA but there is no such age limit for rollover contributions. However, I cannot find a cite to a statute or regulation for this. I assume that the rollover contribution made by the employee/husband was valid even though he was age 73 at the time. My client is looking for statutory or regulatory authority for this.

Any information and/or insights would be appreciated!

A business is having poor cashflow as they get to the end of the year. 4 Owners have chosen to reverse their Q4 paychecks, of which the payrolls have already been processed including 401k deductions & company contributions. These paychecks each had deferrals, safe harbor match, and some had loan payments associated with them. The owners will be returning the amount of their net paychecks to the company.

It's the first case I've come across where a business is reversing payrolls. Has anyone dealt with this before? With a detailed letter of explanation signed by a trustee, my plan is to reverse the contributions, including gains/losses, as if it were erroneously transmitted & funded. A check for the lump-sum would be issued, payable to the company.

Any other thoughts?

Help! I'm trying to find a source that says the estate is the beneficiary when an IRA owner doesn't name a beneficiary (assume the IRA agreement is silent, that it doesn't provide a default beneficiary such as the spouse or the estate).

Without a beneficiary, I guess state law says that it goes to the estate (assume not a community property state)?

For purposes of determining whether an employee is a full-time employee (for purposes of determining liability for the excise tax), while payment for hours in which an employee is entitled to payment for a period of time in which no duties are performed (such as vacation or holiday) have to be included in hours, if the employee receives pay in lieu of vacation or holiday, is that taken into account as hours of service? The employee is getting the pay but is not taking the hours for which the employee is entitled not to perform services. It seems to me that the answer should be no. Does anyone have a different view? If so, what are your reasons for taking that view?

Is it acceptable to sign a plan Adoption Agreement using a digital signature generated by Adobe Acrobat?

Thanks.

Small 401 was established in 2015. owners have not deferred into it but were funding their SIMPLE IRA. Can those contributions be reversed or should the SIMPLE file a VCP? I know IRC 408(p)(2)(D) states an employer cannot maintain a SIMPLE IRA and another qualified plan in same calendar year.

A participant took a distribution that attracts the extra 10% tax on a too-early distribution, unless the participant is totally and permanently disabled.

The plan's administrator approved the participant's claim for the distribution because the participant was severed from employment. (Nothing in the plan's provisions calls for any decision about whether a participant is disabled.)

The payer asked the plan's administrator to sign a form to state the administrator's finding that the participant is disabled. The administrator declined to sign, not only because it had not made such a finding but also because such a finding is unnecessary in the plan's administration.

The participant is worried that the payer will tax-report the distribution without putting the disability code on the Form 1099-R. She worries that the IRS's computer will flag her tax return as one that ought to have included the form for declaring the extra 10% tax on a too-early distribution.

Is the participant's worry grounded in BenefitsLink mavens' experience?

If the payer wants to respond to the participant's worry, may the payer make its own decision (without involving the plan's administrator), solely for tax-reporting purposes, about whether the distributee is disabled?