austin3515

Participant takes a hardship for a home purchase, but the deal falls through. Can the money be re-contribyted? I think not, but in this case it's a decent chunk of change.

That's the one. Only other one I know of is to limit the top-heavy minimum to a few pennies. But yes, in this case, I have an HCE that wants to save for retirement who "only" makes $120K. So he's deferring about 15% of pay. The owner has oodles of money and would prefer to allow this fella to save for retirement. Just warms your heart, doesn't it?

I would be limiting the owner to $1. Thanks Tom!!

When must an amendment be signed to implement this change effective January 1, 2011. In my situation the owner (age 50+) has not made any deferrals. So I should be able to still sign this amendment, correct?

I say use it towards the SHNEC. My lord, it was just a Q&A where they said that!! (assuming your document with a favorable OL/DL allows it--ours does)

But if the plan has a last day rule, and/or there are employees who are not receiving the same deposits during the year, then I'd say you have some problems not unique to partnerships.

When is the 2011 form coming out?? Or are you guys just adding the 2011 date range to the 2010 5500?

We are a TPA shop... Has anyone gone "paperless" yet? I'm just curious to know because it seems a lot of the paper reports could easily be scanned and used by anyone from anywhere, etc. Also, it would make it easier for multiple people to work on the same spreadsheet without having to know what the name of the spreadsheet is. I'm looking for a paperless binder that can store all file types...

They scarcely provided any service at all. In fact it's possible that many of the partners did nothing at all, as administrative responsiblities are relegated to only one or two of them.

Got a partnership (medical practice) where the Docs transfered to a hospital 12/31/09. In 2010 they collected receivables in the old company, but provided only very limited services related to closing down the practice, most of which was being done by third-parties, accountants, etc. Can we do profit sharing for them? They will have box 14A comp.

I agree, today he doesn't want another one. But what about in a year? Or even 6 months?

Bill, I had the same thought. But then let's say for example he wants another loan. Do we let him take it? I suppose the answer is yes because for him, the loan has been repaid via an offset, but I'm a littl iffy on the logistics. But I also like the idea of amending the loan program to allow this. I've definitely read about this type of transaction somewhere so I know it's doable. I'm just a little iffy on the mechanics.

Participant is eligible for an in service distriubtion, and wants to offset his participant loan via an in-service distriubtion without actually taking the money out of the Plan. Can he just fill out an election form to that effcet? I know this is POSSIBLE, but does the document specifically need to allow this form of distribution?

I'm sure the auidoit covered a full 12 months. The confusion relates (presumably( to the fact that the plan was terminated effective 11/30/09, which does NOT create a shprt plan year (at least for 5500 reporting purposes). So if a) you terminated the plan such that no one is eligbile to participate asof 11/30/2009 and b) less than 100 participants have account balances, then you do not need an audit. The employees who elected not to participate (and who terefore have no balances) are no longer considered participants in the plan folloowing the terminaiton date.

GMK, just make sure this new enhancement complies with your document. The way most "payroll to payroll" matches are written, you ONLY look at the deferralsd and comp in that specific pay-period.

It doesn't matter whether they actually defer - it only matters if the employer sponsors or maintains another plan. We've been over this every way till Tuesday and have concluded it cannot be done. (KVein, the new owner will want to participate!)

Company A is a sole proprietor, no employees, and sponsors a solo 401k. Company A wants to buy Company B, which sponosrs a 401k plan with employees. The surviving plan will be Company B's plan. Owner of Company A would like to get his money into an IRA account before he buys the other company. The closing is scheduled so this is all basiclaly a sure thing. If he terminates his plan (i.e., Company A's Plan) and rolls his balance to an IRA before he acquires company B, will his rollover be deemed ineligible for rollover?

JackPot (courtesy of TAGData) EPCRS (2008-50), 6.06(2), a little more than halfway through that giant paragraph: If an Excess Allocation resulting from a violation of § 415 consists of annual additions attributable to both employer contributions and elective deferrals or after-tax employee contributions, then the correction of the Excess Allocation is completed by first distributing the unmatched employee’s after-tax contributions (adjusted for earnings) and then the unmatched employee’s elective deferrals (adjusted for earnings). If any excess remains, and is attributable to either elective deferrals or after-tax employee contributions that are matched, the excess is apportioned first to after-tax employee contributions with the associated matching employer contributions and then to elective deferrals with the associated matching employer contributions. Any matching contribution or nonelective employer contribution (adjusted for earnings) which constitutes an Excess Allocation is then forfeited and placed in an unallocated account established for the purpose of holding Excess Allocations to be used to reduce employer contributions in the current year and succeeding year(s). Such unallocated account is adjusted for earnings. While such amounts remain in the unallocated account, the employer is not permitted to make contributions (other than elective deferrals) to the plan.

My professional opinion is that this is a mistake of fact (at least that's the position we're taking, but of course EVERYTHING is subject to 2nd guessing). It is not simply that he didn't earn enough. It was a misunderstanding regarding how the income would be reported on the tax return. But of course, we will be including the requisite CYA language. P.S., thank you very much for the site in the Corbel document!!

I only keep score when I'm winning so I have no idea...

I agree with you on the "anyone deferring and not getting the match would be a zero in your coverage test." But you also need to run BRF.

You've got two match formulas: Graded Match - 0% on 0 to 4.999%, and then 100% on 5% or greater Graded Match - 0% on 0 to 4.999%, and then 140% (right??) on 5% or greater if you have at least 10 years. So, you need to make sure the people covered by each formula passes benefits rights and features.

Sieve, in light of you vast and extensive contributions I will over-look your oversigth regarding the changes to the final 415 regs which now require that the sole means of correcting 415 violaqtions is through EPCRS

From 1(a) above: To the extent that the excess annual additions relate to elective deferrals or after-tax employee contributions, the corrective mechanism is to distribute the excess amount (with attributable earnings). See section 6.06(2) of the EPCRS Procedure. An ordering rule is prescribed for making the correction when the violation involves IRC §415:> This is what I'm talking about!!!

K2 - right on! Once I gave up on the 415 correction, I decided to look into my other problem, max deductible. Does the Corbel EGTRRA 401k prototype allow for a refund of employer contriutions based on revenue ruling 91-4 (i.e., contribtion exceeds max deductible due to a mistake of fact). I did not see it... Does it need to be in the document? In my case, the CPA thought the LLC was being taxed as a partnerhsip, but it was an S-corp, and W-2 wages did not suport it. Not sure if you agree, but we think a) this was definitely a mistkae, and b) the "fact" was the form of entity regarding which the CPA was mistaken (I'm pretty sure it switched in 2010)!