A 100% business owner of a PC (must be a licensed professional to be the owner) lives and does business in a community property state.

The owner has children from a prior marriage and they are employed by the business. These kids are HCEs due to attribution.

The owner's spouse also has children from a prior marriage and they are also employed by the business. These kids were never adopted by the business owner. Due to community property rules of the state, this spouse is considered as owning 50% of anything the business owner owns. Due to that, are these kids, the step-kids of the business owner, HCEs? Or is that double attribution?

It is my understanding that a 410(d) election goes to the characterization of the plan, not the sponsor. If so - or perhaps regardless - may an employer sponsor one or more non-electing church plans and, at the same time, sponsor ERISA-governed plans?

A plan document interim amendment was signed 12/31/2012. As part of this good-faith interim amendment, the plan was amended effective for plan years beginning in 2012 to incorporate MAP-21 provisions and rates. As part of the amendment, a plan sponsor could elect to delay MAP-21 to plan years beginning in 2013 or to apply the MAP-21 provisions just for the AFTAP.

Question: must there be a written election to the plan actuary to use the MAP-21 rates? Or does the signed amendment incorporating those rates suffice?

Thanks.

Under the Roth in-plan conversion guidelines set forth in Notice 2013-74 (all money types), must the available converstion assets br 100% vested? If seems to make sense, but I can't find anything specific. If the answer is no, can the plan amendment require 100% vesting? Thanks

I am working on a plan that terminated 12/31/2012. There are four participants - a husband and wife (owners) and two employees. The final two distributions were in September 2013, when each of the two owners took a reduced benefit (since the assets weren't suffcient). At the end of September the account balance was $0.52. In October, there were $64 in dividends that were promptly transferred pro-rata, to the two owners. At the end of October, the account balance was $0.30. In early November, the remaining 30 cents was transferred out and the account was closed. For the 5500-SF. Would the plan year end be 9/30/2013 or 11/30/2013?

Any help would be appreciated!

I am working on a plan that terminated 12/31/2012. There are four participants - a husband and wife (owners) and two employees. The final two distributions were in September 2013, when each of the two owners took a reduced benefit (since the assets weren't suffcient). At the end of September the account balance was $0.52. In October, there were $64 in dividends that were promptly transferred pro-rata, to the two owners. At the end of October, the account balance was $0.30. In early November, the remaining 30 cents was transferred out and the account was closed. For the 5500-SF. Would the plan year end be 9/30/2013 or 11/30/2013?

Any help would be appreciated!

Is there any rule/regulation that a new plan (small 401-k/Profit Sharing) has to start on the 1st of the month (january1, July 1) or could it be any other day of the month?

Within the past 2 months, I have gotten referrals from a couple of accountants regarding old "keogh" or small one person plans that were set up with Citibank many years ago. Citibank is trustee and the plan uses the Citibank prototype. Now, all of a sudden, Citibank is waking up and saying that they don't have a signed copy of the EGTRRA restatement and they have frozen these accounts until the matter is corrected through VCP.

In at least two of these referrals, the client has nothing since the original establishment back in the 80s. Requests to Citibank to look for interim documents is not yielding any results.

The standard VCP submission using Schedule 2 would require separate restatements and interim amendments, as well as the latest prior plan document. I probably couldn't even find some of these old document templates (such as TEFRA/DEFRA/REA). Will the IRS consider an application under these circumstances that just includes the EGTRRA document?

Considering that Citibank probably has some culpability for not monitoring the continuing qualification of the plans for which they are trustee, it is pretty heavy handed to place full responsibility on the shoulders of these individuals who assumed that Citibank was taking care of this and who do not have the resources that Citibank has.

Thanks for any input.

My question has to do with the the fact that the 5304 states..."Not for Use With a Designated Financial Institution" Ahhh.. what is a "Financial Institution" ??

Is the Financial Institution a specific family of funds like American or Vanguard? Or is the Financial Institution the firm that the financial advisor works for?

I take it to be the financial advisor's firm... but I want to be spot on correct!! How do others interpret that statement?

Im leaning toward telling this FA to use 5305-SIMPLE

Thanks

What are members reactions to this T.C. memo (Bobrow v Commissioner T.C. Memo. 2014-21) applying the rollover waiting period to all IRAs that a taxpayer maintains?

Hey all,

Long time lurker and first time poster on the forum! I am hoping for some help with the following question about controlled group status. I believe I know the answer but I want to double check before submission to legal counsel for confirmation.

Do the following companies pass the controlled group testing requirements?

MW

RW*

WCDC

Husband

32.50%

50.00%

20.00%

Wife

16.00%

0.00%

20.00%

Sister

32.50%

50.00%

20.00%

Other1

10.00%

0.00%

20.00%

Other2

0.00%

0.00%

20.00%

*RW wholly owns another company - TR

My conclusions are the following:

1.) MW and RW are a controlled group

2.) MW and WCDC are a controlled group

3.) RW and WCDC are not a controlled group

4.) TR is part of the MW and RW controlled group

Client would like all companies covered under a single plan.

What are your thoughts about the controlled group status and the plan issues with attemting to cover the companies under a single plan?

Thanks!!!

One of the plan's HCEs received a much larger match than he should have. The plan year is now over.

(1) By definition, is this excess considered an "excess contribution"? I do not think so, as that term applies to employee 401(k) contributions that need to be returned due to a failed 401k test. Is their an official term that describes this type of contribution violation?

(2) Does the match simply come out of that HCE's account and is used for future employer contributions?

(3) Does the excess amount still count in the HCEs ACP test, as well as in the 401a4 testing (cross-tested PS allocation in the plan)?

Thanks

I recently took over a plan and while reviewing their loans, I discovered two loans were done by the prior recordkeeper as weekly repayments, the plan has a bi-weekly payroll. Therefore the weekly payment amounts were set up but paid only bi-weekly. Loan #1 should have been paid up already - it has a very small balance left - $250. The 2nd loan still has a significant balance (8,000) and is supposed to be paid up by 2015 - but right now won't pay until almost 2020.

I think the loan that is due in 2015, can be paid back now and then the participant can take out a new loan with the correct amortization schedule. Is there thing else that needs to be done for this?

In regards to the loan that is technically in default, any advice on this?

I searched about this topic and did not see it covered exactly like this, so that is why I'm starting a new post. I apologize if this is already discussed sometime in the past.

DB Top Heavy Plan:

Plan effective 10 years ago.

Top heavy each of last 6 years and will be going forward.

Participant Smith has been there over 10 years.

Plan formula is only 0.5%, so 2% TH minimum accruals will be greater.

So as of 1/1/2014, Smith has 6 years of TH service.

Question 1:

Smith's NRD is 5/1/2014, so can he get a partial year of TH service?

Plan doc says TH svc based on 1000 hours. So if he works <1000, he gets nothing, and if he works >1000 hrs, he gets a full year of TH service?

So no partial years?

Question 2:

Final average earnings (5 years) - is that full plan years only or can you use top 60 months? All literature I see refers to plan years, but there doesn't seem to be examples where someone leaves sometime other than the end of the year.

Employer with volume submitter DB plan (Corbel individually designed volume submitter plan) did not sign 436 amendment by 12/31/13. Want to correct using VCP with new Form 8950 and Appendix C. Having trouble determining whether we file a Schedule 1 or Schedule 2. How do I determine whether the "corrective amendment was adopted before the expiration of the plan's extended remedial amendment period (as determined under Rev. Proc. 2007-44) for that amendment"? Since the IRS extended the deadline for the adoption of the 436 amendment twice, what is the "extended remedial amendment period" for the 436 amendment?

A plan has a match formula in the Document for which they only make once a year after we do the calculation. At the same time we do the match calculation, we run the ACP test using our calculated numbers. In this case, the ACP test fails using the numbers we projected but were not yet made.

Does this need to be done in chronological order (i.e. they make the match and then ACP returns/forfeitures)? Or can any steps be saved in the process and, if so, what?

We know that to handle the ACP returns, unvested match amounts get forfeited and vested amounts are distributed.

Thank you.

What percent of those that have Medicare also have voluntary supplemental coverage?

I am doing an ADP Refund of Roth plus gains on an owner at age 56- are gains taxable?

We have a situation where 2 participants have investment elections on file, but due to an administrative error deferrals were not taken from their check for 3 months.

My interpretation from EPCRS is that the actual returns should be calculated, and if those happen to be negative than go with the DOL calculation because you have to at minimum make the participant whole. In the event there's no investment election on file, then a weighted average method could be used. The Highest Performing Fund calculation can also be used if it's easier to calculate, but this could prove to be much more expensive.

Am I correct?? I am getting confused between this and the missed opportunity deferrals.

I have an employer that is closing its doors and terminated all of its employees in December 2013. The plan includes a discretionary match provision, but requires employment on the last day of the plan year to share. No formal plan termination resolution/amendment has been executed to date.

Is there any way the plan can waive the last day allocation requirement for the prior plan year and allocate a match to the terminated employees? Would an 11(g) amendment work?

The plan is roughly 100 participants with 2 HCE's.