Does anyone know if there is a spreadsheet out there that I can use to calculate the earned income for the plan from the Self Employment earnings for a partnership? I have 2 spreadsheets that I use but neither one addresses the Section 179 expense. At what point does the Section 179 expense get deducted?

Dr. X has a 401k plan - he's the 100% owner of his practice (he's an eye doctor) and has had his plan for a good 10 years

Dr. X's wife is also a Dr. - she has started her own practice (she's a dermatologist) - their practices are entirely separate except that the docs are each 50% owners of the derm practice.

They would like to have the derm practice adopt the eye practice's 401k plan to contain cost (plan doc, investment platform, etc) - Is this permissible? and then do I have some sort of MEP that requires me to do any special work?

Based on ownership, they are not a controlled group (not more than 50% identical ownership)

Clearly, a separate 401k plan could be set up for the derm practice since the derm and eye practice's are not a controlled group.

Thanks for your help anyone - it's always appreciated

An employer sponsors a 403(b) and 401(a) for hospital employees, and a 401(k) for their "for-profit" division employees. All have 1/1 plan years. For the hospital employees, the 403(b) took the deferrals and the match was made to the 401(a).

On 4/22/2013, the 403(b) plan was amended to begin accepting the match. It will no longer be made to the 401(a). So the hospital employee's matching contributions were made to the following plans for 2013:

1/1/2013 - 4/21/2013: 403(b) match made to the 401(a) plan

4/22/2013 - 12/31/2013: 403(b) match made to the 403(b) plan

When it comes to testing the 2013 match for nondiscrimination (ACP), is it allowable to prepare a 12 month test, adding the contributions together? Or, does that constitute permissive aggregation - which is not allowed with a 401(a) and 403(b)? Would it be better to prepare separate 2013 ACP tests?

I have a client that has a SIMPLE IRA, and they want to start a 401(k) plan this year.

I know that the two are not supposed to coexist in any particular year.

However, could I just start the 401(k) plan up and just say the contributions this year to the IRA were ineligible? Return the funds to the employees and pay the excise taxes? (We are only in March. It may be worth it to the owners to do that).

If a Plan pays out a participant wihout the participant filling out any distribution paperwork is this a PT? No election forms, no spousal consent, etc. they just sent the participant a check. Lots of issues here we're aware of but my only question is, is this a PT?

It appears there is no special treatment for RMD's from Roth accounts.

So for example, if a participant has reached their RBD and they have $10,000 in a Roth salary deferral account and $5,000 in a traditional match account, the entire $15,000 is used when determining the RMD. Suppose the RMD is $600. Can they choose to:

1. Take it all from Roth?

2. Take all of it from Traditional?

3. Take some of it from Roth and some of it from Traditional?

Thanks.

We have a client that has a number of union employees, and does not cover them in DB. One employee gets both union and non-union income (non-union income is from another company in controlled group). Can he be included in the DB to the extent of his non-union earnings?

If so, does it make a difference if he is the owner?

It is my understanding that the tax on early distributions from a 457(b) plan only apply on monies rolled into the plan from plans subject to the 10% additional tax. One of the exceptions to the additional tax applies to distributions from qualified governmental defined benefit plans to a public safety employee (state or local) who separated from service on after age 50.

With that in mind, what if a public safety employee, rolled his distribution from a governmental DB plan into a 457(b) plan and subsequently took a distribution of these dollars - would this distribution be subject to the 10% additional tax?

A client (and RIA) just told me Kiplinger sent out a mailing saying that the IRS will be matching the deduction for ER Contributions on the 1120's with the Er contributions on the 5500. Apparently differences of > $1,000 will receive a letter.

Let's ignore for a moment the number of false positives cash basis/accrual will generate.

Does anyone have any literature on this? An IRS announcement, or perhaps a link to the Kiplinger letter?

If an employee becomes disabled but has not separated from service, is this a distributable event?

In other words, does the "disabled" employee have to be terminated in order to receive a distribution from the plan?

Other info: The employee is an owner/partner and has not severed his partnership with the plan sponsor. The plan is a 401k plan. The participant is already 100% vested. The participant does not meet the plan's in-service age requirement and already has an outstanding loan. The plan does not allow hardship withdrawals.

Question:

Is it permissible to force a 415 failure to create a catch-up?

Scenario:

• Document calls for any employer allocation to be reduced so as not to cause "the annual additions to exceed the maximum permissible amount".
• Participant is catch-up eligible but has not created a catch-up event through Plan Limit, 402g or ADP/ACP failure.
• Participant is an HCE and is being "maxed out" with a cross tested group allocation profit sharing contribution.
• Compensatoin is greater than $255,000.
• $17,500 was contributed in deferal. $7650 was contributed as Safe Harbor NonElective.

With the 2013 415 limit being $51,000, when "maxing out" the HCE can I allocate $31,350.00 as a profit sharing (assuming it passing relevant testing) thereby "creating" a 415 failure in order to create a catch-up eligible event (415 refund) to give the HCE $56500 for they year (415 plus catch-up)?

it seems, given the document language, that "creating" a 415 is not allowable even if the 415 refund would be catch-up eligible and retainable in the plan.

I am working with a Corbel document and Relius software. The Relius Optimizer option automatically creates the 415 failure in the optimizaton process. The act of creating the failure to induce catch-up seems contradictory to the plan document.

If anyone has input or citings that can assist with a proper approach, I would be interested to hear from you.

Thank you.

Under the Internal Revenue Services procedures, a timing rule applies to an employer that adopts a modification from the pre-approved document that the employer otherwise relies on. Instead of applying for a determination promptly after the employer adopts the modification, one instead waits until the two-year window in which the employer adopts the NEXT pre-approved document. Rev. Proc. 2013-6 § 9.03; Rev. Proc. 2007-44 § 16.

If all goes as hoped, the IRSs approval of the modification gets reliance.

But what if the IRS disapproves the modification?

By the time the IRSs dislike of the provision becomes known, the employer might have made contributions, and the plans administrator might have allocated amounts, for several years.

Looking to the plans provision for a return of contributions upon the IRSs disqualification of the plans trust, may the employer get a return of contributions attributable to the modification?

Alternatively, may the employer end the provision promptly after receiving the IRSs communication that the IRS will not issue a favorable determination on a plan that includes the provision, while not undoing contributions and allocations that were made in good faith (before the employer knew the IRSs view)?

Participant rolled into his employer's plan several years ago. In 2013 he requested a distribution of his rollover, and it was paid out - he did not do a direct rollover.

Now that he's received the 1099-R with a taxable amount showing, he is telling us that the funds originally rolled into the plan were not from another plan, just his own personal funds that were already taxed, just because he wanted everything "in one place". He wants the 1099-R revised to reflect the same.

If he is correct - and that's not certain - then it should have never rolled into the plan in the first place. But how is my client the plan sponsor supposed to know this if was originally represented as such? And what sort of documentation should the sponsor require before considering amending the 1099-R - if he should even consider this at all? Any other correction the sponsor should consider? It is out of the plan now so if it was an invalid rollover at least it is now corrected.

Thanks.

I am working on one-man (doctor) plan. His normal retirement date is 1/1/2019, when he is 62. However, for some reason, the plan was set up as 10% of average comp per year of participation starting on 1/1/2006. Therefore, he will be fully accrued at 1/1/2016. His 415 lump sum limit is based upon his average comp, which is only about $140,000 (and it is very unlikely that he'll be able to establish a new high-3 average comp, as his recent comps have been low). He would like to terminate the plan 1/1/2015 or 1/1/2016 and be able at that point to take a distribution equal to his 415 lump sum limit. However, since he will only be 58 and 59 on those dates, his 417(e) lump sum will be considerably lower than his 415 limit, as it the 417(e) lump sum will be discounted from age 62. I don't think that it is reasonable to amend the normal retirement age to anything lower than 62. Does anyone have any idea how I can enable him to take a distribution equal to the 415 limit?

Any thoughts would be appreciated!

Is a non-safe harbor 401k plan that is found to be top-heavy at 12/31/13 required to make a top-heavy contribution to a HCE (by income) who is a non-key employee?

I believe the answer is yes - that the requirement to pay non-key employees doesn't differentiate between HCE's and NHCE's - but I'm getting old

Thanks.

I was released from a large company on 8/31/13 and offered COBRA coverage accordingly. None of the notifications or the plan summary description make mention of a need for my 67 year old husband to become entitled to (sign up for) Medicare part B to receive identical coverage. In our coverage the day before I was released, he did not have Medicare B.

At the end of December we learned my husband would need surgery. The first week of January, I called the provider to verify our coverage & maximum out of pocket for him. The reply I received that day was in line with what I understood our existing coverage to be. I called again a few weeks later to see why claims weren't being paid as usual. I disclosed that we were COBRA and that he had Medicare part A, but not part B. I was told that they would resubmit for payment, it would take 30 days. I called several times to monitor status on this. Until 3/11, the answers were that it was in process, it would be 30 days. After 30 days was up, the answer was that review was complete and that it would take an additional 30 days for full correction.

Last Tuesday, on 3/11/14, I was informed that because he is "eligible" for Medicare, they will only be paying 20% rather than filling the gap for part B. He is indeed eligible for part B, but he is not entitled to part B. Since he was under my insurance plan 2 years ago when he became eligible, he declined, so is not entitled. Nevertheless, his coverage has changed from the day before I was terminated to a 20% limit. There is no indication of this possibility in any of the COBRA documentation or summery plan description.

I have been searching for information on COBRA & Medicare. My understanding of the law is that it pertains to entitlement, not eligibility. If he had signed up for Part B, he would be entitled. Since he didn't, he is only eligible. I've talked with both the company (self insured) and the carrier about this. They are both sticking to the "eligibility" status as reason for declining coverage now although there has been a variety of answers to this from both of them.

The first surgery was double hernia on 1/10/14 after my initial call to the carrier. During pre-op workup, we discovered he had a large dissected aneurysm and leaking valve. He had open heart surgery on 2/10/14. We are now being informed we are responsible for a gap mounting into tens of thousands of dollars.

I think they are confused about entitlement vs eligibility. The last company rep I talked to said there have been other cases like this.

My questions are:

Is there a COBRA exclusion that allows them to require Medicare B entitlement or a change in coverage like this? If not, what recourse do I have?

If there is a COBRA exclusion that makes this legal, do I have recourse with the carrier who gave me incorrect information for 2 months while we incurred extensive medical bills?

Thank you,

Sue B

Is it a prohibitive transaction for a Grandfather to lend money from his Profit Sharing plan to a company that is owned 25% by his Grandson?

Hello,

I've been trying to find a particular case.... and for some reason all my resources are coming up dry.

Can anyone help me find information on the following case:

Lee, et al v. Builder's Supply Co, et al

Assigned to: Senior Judge Thomas M. Shanahan

U.S. District Court

District of Nebraska (8 Omaha)

CIVIL DOCKET FOR CASE #: 8:93−cv−00267−TMS

Thank you,

Lisa

Pardon this senior moment, but

I'm setting up a SHNE 401(k), usually this would be done for a January 1st ed and the SH Notices would go out by December 1st of the previous year.

Prospective client wishes to go ahead with a safe harbor 401(k) 30 days after he supplies the employees with a SHNE Notice, which he wants to give out this week, which would mean that contributions would start May 1st.

Plan year = calendar year = limitation year, so what is the plan effective date? May 1 and a short plan year 5/1/14-12/31/14; or January 1 with comp measured on participation?

Sorry for the brain fart.