K-t-F

We will prepare a new 5305. I am not sure how old the accounts are. What he wants to do is simply bring along the accounts to the new investment platform. Here is what he wants to do.... Establish new Simple accounts for each participant rollover the old simple accounts into the new accounts continue the deferrals in the new accounts Is that being too simple?

huh.. very interesting. But, "with instruction from the participant" can the SIMPLE IRA be moved/rolled over? and subsequent contributions be contributed to the newly established account or is it just something that is never done? As you can imagine, the advisor wants the money under their control! Thanks

SIMPLE plans are not my bailiwick, with that said here is my question... I have a financial advisor who has a few SIMPLE plans and he asked me what he needs to do to move the assets of the plan from one custodian to another. What he has been doing is placing his SIMPLE plans with a large mutual fund who prepares all the paperwork for the plan. These simple plans are not going to essentially change at all. He simply wants to move the assets from the mutual fund to individual investment accounts somewhere else to offer a wider range of investment choices. Thoughts... suggestions? Thanks

I dont have the EOB... I did find § 1.457-1 through § 1.457-12 online and saved them. Ill look them over and refine my post. Regarding a written document, § 1.457-3 says this: § 1.457-3 General introduction to eligible plans. (a) Compliance in form and operation. An eligible plan is a written plan established and maintained by an eligible employer that is maintained, in both form and operation, in accordance with the requirements of §§1.457–4 through 1.457–10. An eligible plan must contain all the material terms and conditions for benefits under the plan I have seen posts that say a 457(b) plan does not need a plan document. There must be different types? or are people just wrong? Im using the FT William doc now, dont currently subscribe to the 457 doc. I think they have a "prototype format" doc (dont quote me) similar to their VS "prototype format" doc. Ill ask. Thanks

I have the opportunity to take on a small 457(b) plan and want to understand them before I agree. Is there a pretty good source, a 457(b) plans for dummies source, that will educate me on the finer points of this type of plan? Can anyone throw out some areas that I should watch out for with regards to these plans? thanks

It is a mandatory 9% employee contribution. The employee earns more than $250K so compensation would max out at the 401(a)(17) compensation limit (it states that in the ORP paperwork) which means that the obligated contribution alone would exceed the 402(g) limit (because the employee is not 50 years old). From what I have read and what you all have have contributed, I think he is ok deferring $17K into his own 401(k) plan. Thanks

I was asked if a college professor who is part of the ORP (Optional Retirement Plan) at his school, and who must contribute to the ORP plan..... does the contribution that he makes to the ORP count towards his 402(g) limit? It is an employee contribution.. I honestly dont know if it is considered a "salary deferral" Anyone know these plans" This professor is an employee of a state operated university and at the same time has self employment income separate from his college income for which he sponsors his own 401(k) plan. He wants to max his 402(g) contribution outside of the ORP but doesnt know if he can.. he doesnt know if the money he is required to contribute to the ORP counts towards the 402(g) limit. Thoughts? Thanks

This is not my expertise... probably a very simple answer... I was asked if a college professor who is part of the ORP (Optional Retirement Plan) at his school, and who must contribute to the ORP plan..... does the contribution that he makes to the ORP count towards his 402(g) limit? This professor is an employee of a state operated university and at the same time has self employment income separate from his college income for which he sponsors his own 401(k) plan. He wants to max his 402(g) contribution outside of the ORP but doesnt know if he can.. he doesnt know if the money he is required to contribute to the ORP counts towards the 402(g) limit. Thanks

Just to clarify further... Is a "participant" an employee who works more than the hour requirement AND has an account balance in the plan? Do you count employees eligible to defer/receive a NEC but are not and do not have a plan balance as a plan participant?

I know it's not common, I would allow it. Just need to dot the "i"s and cross the "T"s .. Thanks

I received a call today, a participant has a loan in a plan and is leaving his employer. He wants to roll the loan balance into the new plan at his new employer. Can this be done... if the distributing plan and receiving plan both allow? (I guess it first depends on the distributing plan)

Ok.. so .. Im guessing an ERISA attorney should be asked if the income can be used. No one would move forward on this plan without the blessing of an attorney for fear that a few years down the line Uncle Sam came in and disallowed the income and the plan. So.. that is the next step. I appreciate everyone chiming in. Last question... anyone know an attorney who may be good for this situation?

so... are you saying that he can use his AA money to establish a plan? because he is paid for "appearances" and "promotions" rather than coaching? What if this was true... what if he established a Sub S corp and the AA money was paid to the S corp? Is that a layer that might work? or is that just a layer. I learned that the U pays all his benefits... Insurance, workmans comp... everything. The AA doesnt pay anything. Straight 1099. I dont know what would happen to the income stream from the AA if he was fired. Ill find out. Thanks for ell the help

ahhh.. he does sound like a statutory employee. BUT.. can I still hang in there with a slim hope if it is determined that the compensation paid by the outside source is not under the control of the university?

Interesting....I admit that I am not knowledgeable with regards to what you are saying. Do I have it right.... The coach is paid by the university... $250K W-2 The coach is paid by the alumni association $750K 1099 And if the University has control of the alumni association then in essence he is considered to being paid by one entity? This all hinges on who controls the alumni association If they work independent from the university then looks good... if not.. then there is a problem.

That is great... but do you see any issue with him doing the same job and earning income from 2 separate sources for that same job? I want to make sure I am perfectly clear... - He is a coach for a university - The university pays him to be a coach ... $250K.. and issues him a W-2 - He is also paid $750K over and above the university's paycheck for the exact same position by an outside source... and the outside source issues him a 1099 which he declares on a Schedule C. Does that send up any flags? Im going to look at Pub 560 Thanks

Potential new DB plan. Client is a coach for a college team and earns $250K W-2 from the university. He also earns 3x that from an alumni foundation to make up his 1M annual salary. The $750K is paid to him on a 1099 and he files a Schedule C. Can a DB plan be setup under his Schedule C using that compensation? Thanks

QDRO... would you be willing to share with me the favorable response the DOL had provided?

Ahhh yes.. I need to consider them one company.

What if Company B had a Simple? Does that have any bearing on this situation?

Gotta be a slam dunk... 2 businesses, A and B Wife owns 100% of each Totally unrelated businesses... (nothing to do with each other at all ) Wife only works A, she is the only employee Husband works B, 4 employees - Husband and 3 workers Wife technically makes no $$ from B Doesnt matter does it... If wife wants to open a solo plan using A she has to include B... correct? thanks

There is no operational even happening. The plan is a one participant plan and the one participant is 64 year old. He is not required to take a distribution nor calculate anyone else's account balance for administrative purposes... because there is no one else. We have been faithfully consistent valuing all his LPs the same way from the beginning of time. In the agent's letter to my client he refers to Revenue Ruling 80-155 which states: In a defined contribution plan, Rev. Rul. 80–155, 1980–1 C.B. 84, provides that since amounts allocated or distributed to a participant must be ascertainable, the plans must value their trust investments— • at least once a year, • on a specified date, • in accordance with a method consistently followed and uniformly applied. He provided the quote above but neglected to include the 3rd option.... "• in accordance with a method consistently followed and uniformly applied" We technically have complied with all 3 above! Im beginning to think Uncle Sam is trying to generate some revenue on the back of this one man plan.

This plan has been in existence for many many years and it has always filed en EZ. Not shirking that requirement. The agent closes his letter with "I have proposed several options and there could be other options which I did not think of" which leaves the onus on me to find a more favorable resolution.

This client is not devaluing the investments to reduce any RMD.... there are no loans... its a very vanilla PS plan. We have valued them based on the K-1s capital account analysis or at cost if that info is not available.... consistently. There are NO employees besides the owner. I feel the IRS is making a mountain out of a molehill. Thanks for chiming in.

A client who has a PS plan and is the only participant has been investing in LPs for years. He has substantial value in his plan and most of the investments are LPs. He just recently was audited and the IRS agent has come down hard on how my client has valued the LPs over the years. My understanding of valuing a LP is that it is not definitive. Each year the investment issues a K-1 which shows the "Limited Partner's" "Ending Capital Account" value. It is my understanding that at any time a LP can hit it big... can fail miserably... or just continue to be. Of course everyone wants their LP to hit it big and pay out huge dividends... "yea". But until that happens the limited partner crosses their fingers and hopes they dont lose everything. For years I have been consistent with how these assets have been valued. I am looking for any help arguing my case that the way I have accounted for these assets is ok. Any help is greatly appreciated.