WDIK

My neighbor uses his insurange agent for tax advice. That is how he defaulted on half of his mortgage.

My neighbor defaulted on half of their mortgage. Now they can only use the 2nd floor of their home. They have to use a ladder to climb out the bathroom window whenever they want to leave. (Do I really need to say, "Don't take this post seriously"?)

Not to oversimplify the complexities of multiple employer plans, but I don't see how the "couple of employees" can be considered active participants in a plan their employer no longer "sponsors", and I would apply the appropriate plan provisions regarding distributions to participants of their status.

In my opinion it will be six of one or a half-dozen of the other. Either option should accomplish what you want.

I concur. Again, I concur.

We have generally recommended that nonconsensual cashouts above $1,000 be eliminated, but you may want to check out this website.

My recollection is that such a rollover is acceptable under EGTRRA.

I enjoyed the rhyme, but shouldn't it be titled "A Politically Correct Holiday Poem.

You can search for many investment terms at this website. Why can't everyone use understandable terms like "EGTRRA", "QNEC", "Standardized Safe Harbor Prototype", "Actuarial Equivalence", etc? (Edited for typo)

While not specific to this forum, have you tried www.googlerankings.com?

The Box 13 instructions indicate the following: • Retirement plan. Check this box if the employee was an “active participant” (for any part of the year) in any of the following: 1. A qualified pension, profit-sharing, or stock-bonus plan described in section 401(a) (including a 401(k) plan). Edit - Sorry, I didn't see the duplicate thread where this question was already answered.

I would think that it depends on how the 11-month eligibility period is defined in the document. For example, it could state that an employee must be employed at least one day during each month of the eligibility period to qualify.

Where's an embarrassed smiley when you need one?

For some reason, recent personal message that I have sent to other board members are not being saved in my "Sent Items" folder. Is there some setting I need to change? Have any others experienced a similar problem?

This subject has been bothering me, so I decided to do some additional research and will share the results here in summary. Telephone conversation with the IRS: A non-owner spouse is not required to receive compensation if an agreement is in place designating said spouse as a volunteer, otherwise compensation is required. The owner must receive compensation. Telephone conversation with the DOL (wage division): A non-owner spouse must receive compensation unless the company's revenues are under $500,000 and the company does not participate in interstate commerce, in which case no compensation is required because the company is not subject to FLSA. The owner is not required to receive compensation. Telephone conversation with workers' compensation: An unpaid spouse is treated as an employee and will be treated as receiving compensation whether or not wages are paid. Telephone conversation with state labor division: An unpaid spouse is considered an employee by definition. Actual state code: Employee does not include an individual employed as an agricultural laborer, or in the domestic service of a family or person at his home, or an individual employed by his parent or spouse. Additional state code reference: The minimum wage established in this chapter does not apply to an employee who is a member of the employer's immediate family. A web article indicating that a community property state would probably treat the unpaid spouse as constructively receiving half of the business income as wages subject to FICA. Numerous web article presenting the advantages and disadvantages of unpaid family members. This has become almost laughable (if I hadn't wasted so much time). I will therefore replace my previous comments with the following two: Consider Lame Duck's final sentence. It's just easier to pay the spouse.

I searched the IRS website for "zero salary" and came up with nothing. I searched the IRS website for "unpaid family" and came up with nothing. I searched the IRS website for "unreasonable salary" and came up with the following: "Unreasonable salaries. If a corporation pays an employee who is also a shareholder a salary that is unreasonably high considering the services actually performed by the shareholder-employee, the excessive part of the salary may be treated as a distribution to the shareholder-employee. For more information, see chapter 2 in Publication 535." I have asked several CPA's that have told me that paying a spouse zero is allowable, but they cannot provide the authority for their position. I am certainly open to either position in this debate, but would like something a little more definitive than has been provided thus far.

You raise some very interesting points, but I don't think that it is as black and white as you portray. For example, the census bureau reports as employed certain "unpaid family workers" that work 15 or more hours a week. Another example is the husband that is denied unemployment insurance because he is not considered totally unemployed due to assisting in the operation of his spouse's business even though no pay is received. Other examples may support your position. I would be interested if anyone can provide a definitive citation one way or the other.

Two points. 1) The first sentence of the section cited by Lame Duck starts out by stating "An hour of service which must, as a minimum, be counted..." (emphasis added). It would appear that an employer could be more liberal in defining of an hour of service. 2) Plan language is certainly a factor that will impact determining an hour of service. However, I do not concur (at least presently) that a spouse of a business owner is not entitled to payment simply becuase there has been no payment.

Certainly it seems clear that no compensation means not in the test, but does that mean that such people are not participants? And again, in this context, the spouse will have compensation for 2005.

I see this as a very pertinent point. Certainly the determined status could not remain solely in the vaccuum pertaining to the retirement plan. It does seem to me, though, that hours worked could be documented in a number of ways (time card, statements by office staff, etc.). Just because the agreed upon rate of pay is zero does not mean that no employee services were peformed.

Are you referring to the "Overstated Loan" thread?

Perhaps the following thread may be of some assistance. http://benefitslink.com/boards/index.php?showtopic=27517

As the original poster indicated, the spouse would be given salary in 2005. The issue is whether or not she would be an eligible participant in 2005 based on sufficient hours but no compensation in 2004.

You will find an interesting discussion in the following thread: http://benefitslink.com/boards/index.php?showtopic=21923 If you want my personal opinion, if you have legitimate documentation that the spouse worked the required number of hours for eligibility then she should become a participant.

I don't mean to come across as belligerent, but what part(s) of your original statement do you consider to be true?