WDIK

Based on Section I of the general instructions for 1099 forms, I agree that a corrected 1099-R showing a zero dollar amount must be prepared and filed.

If I haven't started my Christmas celebration too early, adopting the 401(k) deferrals as part of the profit sharing plan will allow the maximum contribution to be made on a lower salary. Without adjustments for self-employment factors: PS only - $164,000 needed to contribute and deduct $41,000 PS/(k) - $112,000 needed to contribute and deduct $28,000 PS + $13,000 deferrals.

Perhaps this goes without saying, but if you are taking a loan from your 401(k) plan to facilitate the purchase of a home, be sure to ascertain any impact the 401(k) loan will have on the mortgage process as a whole.

A literal reading of the Code 7 definition found in the 1099-R instructions does not refer to normal retirement, only a normal distribution. Use Code 7: (a) for a normal distribution from a plan, including a traditional IRA, if the employee/taxpayer is at least age 591/2, (b) for a Roth IRA conversion or reconversion if the participant is at least age 591/2, and © to report a distribution from a life insurance, annuity, or endowment contract and for reporting income from a failed life insurance contract under sections 7702(g) and (h). See Rev. Rul. 91-17, 1991-1 C.B. 190. Use Code 7 with Code A, if applicable. Generally, use Code 7 if no other code applies. Do not use Code 7 for a Roth IRA distribution.

Let me amend my second statement. I would consider it a 2004 distribution if all of the following are true: 1) The participant requested the distribution. 2) The TPA checking account is not considered a plan investment. 3) The TPA is not considered a partner with the plan. Otherwise I can see the logic behind considering a 2005 distribution. (Determining wheter 1, 2 and 3 are true or false is left as an exercise for the reader.)

pax: If the mutual fund company issued a check to the TPA, wouldn't you consider that as the controlling date? If so, would a direct transfer be any different? If not, are you considering the TPA's checking account as some type of multiple employer trust? (EDIT: Your edit addressed the issues brought up by this post.)

My favorite is actually "A furry with a syringe on top," but that didn't seem very Christmassy.

mbozek: From a legal standpoint, what are the flaws in using the statment "Shared equally among my children living at my death" as a designation for the disbursement of the death benefit.

First, I have never been comfortable with the sort of arrangement that you describe. Second, I give it as my opinion that the distribution ocurred when the money left the trust, in other words 2004. Third, I have never been comfortable with the sort of arrangement that you describe.

Not to diminish AndyH's accomplishment, but it pales in comparison to the feat of one member who not only made three posts in a row in the same thread, but the three posts were also consecutive for the entire forum, on a weekday, during business hours.

Several years ago, an international chess tournament was being held in a swank hotel in New York. Most of the major stars of the chess world were there, and after a grueling day of chess, the players and their entourages retired to the lobby of the hotel for a little refreshment. In the lobby, some players got into a heated argument about who was the brightest, the fastest, and the best chess player in the world. The argument got quite loud, as various players claimed that honor. At that point, a security guard in the lobby turned to another guard and commented, "If there's anything I just can't stand, it's chess nuts boasting in an open foyer."

I certainly am not qualified to give any legal advice, but I am familiar with a beneficiary designation form that gives unnamed children as an example of an acceptable designation. The specific example uses the terminology "My children living at my death."

Are you sure that the SAR needs to be put on company letterhead? I dont' think that this is a typical practice and in my opinion seems to be the only possible link you list to "acting as management."

CORRECTION! Celestial Messengers From Splendid Empires - Angels from the Realms of Glory

Happy Elderly Martyr Without Five Cent Pieces - Jolly, Old Saint Nicholas During The Dark Hours When Herdsman Supervised Their Charges - While Shepherds Watched Their Flocks by Night. Celestial Messengers From Splendid Empires - Angels We Have Heard on High?

At least there is one thing that we can all agree on!

I believe that someone hog4you2 is working with assumes that in the final year of a plan, an amendment should be adopted to reflect the short plan year. I think there is some confusion on the part of this person because Section 2 of the Form 5500 instructions state that "for purposes of this return/report, the short plan year ends...upon the complete distribution of assets of the plan." I believe that the short plan year is for purposes of the return and no plan amendment is required. I can point to no statute, but would recommend that hog4you2 ask the other person to provide some citation supporting his or her position.

I think pax meant that perhaps kathye was doing more than looking for some feedback. (This does not seem consistent with kathye's other posts.)

An "individual" 401(k) plan is merely a type of 401(k) plan designed to target a specific market. I assume that such a plan would have language limiting who could adopt such a design, but you would have to refer to the actual document. There is nothing stopping the business from adopting a prototype 401(k) plan that would cover all eligible employees. A prototype 401(k) plan can also be used to cover a business where the only employee is the owner. For this reason, I'm just not into the so-called "Solo-K" plans. I believe that Wymer is responding to issues of plan testing in general and not to any plan document issues that might preclude adoption in the scenario you describe.

Here are several ideas. Some are better than others. Simple Approach Dear Participant, You need to take a Required Minimum Distribution, etc. Scare Tactic Approach Dear Participant, PENALTIES! PENALTIES! PENALTIES! If you do not take a Required Minimum Distribution, the government will take all of your retirement earnings! High Tech Approach Dear Participant, Please visit the website www.youneedtotakearmd.com for more information. Overkill Approach Dear Pariticpant, Please review the attached pertinent sections of the Internal Revenue Code and their corresponding regulations (attached hereto) to learn more about your Required Minimum Distribution. Please note that your account will be charged for the applicable $17.50 in postage. A More Realistic Approach 1) Briefly explain the necessity of taking RMD’s. 2) Indicate the required beginning date. 3) Indicate the amount. 4) Explain any options available. 5) Note applicable tax consequences and possible penalties. 6) Set a deadline for a response. 7) Cordially thank the participant for allowing you to be of service.

To jane123: The glib answer to your topic title would be that only an individual is eligible for an individual 401(k) plan. I don't think your issue is about whether or not a "solo" 401(k) could be adopted in the scenario you propose. I think what you are really asking is related to the testing rules that apply to all 401(k) plans. Wymer addressed that issue. To PATA: I am in agreement with Wymer's statement.

I wouldn't think so, because she is considered a participant if she is eligible to defer, whether she defers or not. (See definition of active participant in the Form 5500 instructions.)

I haven't heared anything that specific. I can't say that I look forward to a "simplification" of any reporting/disclosure form. The last time simplification ocurred, we got the Schedules D, R and T. (If my memory serves me, which is a highly dubious supposition.)

Until the daughter becomes eligible you should still be able to file the EZ.

It is my understanding that catch-up contributions do not trigger a top-heavy minimum contribution obligation, but they are taken into account in determining whether or not the plan is top-heavy. See Code Section 414(v)(3).