Bird

If the distribution occurred this year then you just have to amend by the end of the year.

Understood. But I think the point is that it's already too late to do anything about it, other than scold and berate the responsible parties and tell them that there is a remote chance that they could wind up being liable. There is no other "action" that I know of that will accomplish anything.

Maybe, I'm not sure, but...you tell me, if someone's 1040 says they owe money, is the IRS doing anything other than going after them? It's really a personal tax issue to the IRS at that point.

Realistically, nothing happens. The participant could make a claim against the trustee, but then the trustee would make a claim against the participant for money they never should have had. Report it on a 1099-R with no withholding.

I say it can be. It's an asset of the plan (receivable) and a liability of the selling employer that is transferred to the buyer - as long as both agree.

If you have 3 items separated by commas and the second one has "or" then it is implicit that all are meant to be "or" - i.e. the text would read like this: *There was nothing in the source document, you had "AND" but I put "OR" in to clarify. Having gone through all that, I don't know of authority for that position.

Typical language would, I think, require the repayment before the 5 year break in order to reinstate forfeitures. The language cited above is what happens if the participant forfeits but isn't paid. I could be wrong; never had to deal with it. But that's how I see it.

Really?! Is this in the regular distribution section? Sound like someone may have been trying to qualify payments for the exception from the 10% early distribution penalty. If the plan allows for a continuous right of withdrawal, then process each payment under that and the participant can do whatever he wants. Otherwise...not sure what to say but these do not sound like nearly equal installments.

Because they think they have to limit regular deferrals to $18K and call anything over that catchup. (Which would be fine but as in this example, you get unintended results.) What they need is a system that allows $24k if age 50+, and $18k if under, and not worry about whether they are catch-up or not b/c it is someone else's job to do that. But it's not gonna happen so as always, it falls on us to fix the mistakes/errors/systems flaws of others.

I agree, if events occurred exactly as described. But I'd want to know why/how the W-2s show only $18,000 before doing anything; something about this sounds screwy.

Mmmm, I agree that superfluous info is a distraction. I guess I've been tempted to do something similar when people send too much information, and maybe even have returned or otherwise informed the provider that I don't want it. But then you run the risk of getting into a pissing match or otherwise wasting a lot of time on something silly. Like a lot of things, it probably depends on my mood at the time. (I did hesitate before posting my initial response, and again before this one, so I must have more time on my hands than I think .)

I guess the PA is trying to proactively absolve itself of responsibility by telling the bank that it didn't read the document and in fact destroyed it. I don't know if that accomplishes anything; would have to ask for a legal opinion. I don't know that we'd read the document but probably wouldn't destroy it. Our process would be to get the beneficiary to complete our option election forms and complete the payment. Part of that would be getting the tax id # for the...trust. It seems pretty obvious that the bank is the trustee of a trust and that a clearer designation would be "ABC Bank, NA, Trustee of the Jane Doe trust dated.xx/xx/xxxx" but I think the designation as written is ok. Is that what the concern is...? What's the issue here?

Wow, congratulations!

Well, it can be rolled over at any time but the extra 25% penalty applies in the first two years.

Maybe someone has experience with guild plans, this is specifically the Directors Guild but probably applies to similar situations. (Not my client but CPA called me about it.) A partnership has a studio and makes commercials. One partner (I think it is just one of them) is in the Directors Guild. Participants in the guild pay into the guild pension plan(s) based on their income, which is reported to the guild, but otherwise not passed through the guild. In prior years, these payments were small and buried on the partnership return as pension expense. An internal audit of some sort resulted in substantial additional pension (and health insurance) costs for 2016, based on prior years' under-reported income (under-reported to the guild). The partnership paid the guild the amount due and called them guaranteed payments to the partner. The amounts are, let's say, $52,000. CPA intends to deduct them on the 1040 as Keogh contributions. To make it interesting, the partnership has a SEP, and partners have typically maxed contributions at $53K. CPA wanted to know if this partner would be limited to $1,000, or could do $53,000, or...? (Interestingly, one of the guild plans is a DB, and one is a DC, and the reported DC contributions were split into "employee" and "employer" and exceeded $53,000.) So...are those guild payments properly deducted on the 1040? Something about that part doesn't seem right, but I can't put my finger on it. I think the SEP contribution could be $53,000. I guess it boils down to "Who's the Employer" for the guild contributions.

Yes

I think the "answer" is that the partnership has to request that information in order to determine the contribution accurately. As Flyboyjohn notes, that may be impractical or impossible. I think I'd want to at least have it on record that I asked for it before doing any calcs. Mmm, I don't think this is solved by taking out the excess, but if it were solved that way, I think everyone would wind up with the same (net) contribution rate, so I'm not sure what you're saying here.

Yeah that is the typical scenario, or some other young HCE. We do the testing in a spreadsheet and if you look at the EBARs you kind of get a feel for when it might work.

Coming in late here but FWIW, there is no doubt in my mind that the loan IS counted for purposes of determining the RMD, and the vesting rule does NOT apply (that is, you don't get out of the RMD simply because cash isn't available). I don't see not having a vested account and not having cash as being analogous.

Been there. At some point you do the best you can and adjust - I'd hope the trust report and individual account records are right, and the 5500 was wrong, and adjust that in the current year.

Never heard of it before this and quick research indicates it is some kind of basis adjustment. I'd say that it should not be part of earned income; unfortunately, I can't say whether it is something that should be adjusted for (if already in the number you have) or ignored (if not in the number you have).

Definitely yes.

I think it's one of those questions that needs to be asked inversely: "Is there any IRS publication or reference that I can use to confirm that the cash value should NOT [my emphasis] be included in the RMD calculation?" The answer is "no." Can't think of any reason at all to exclude that.

Yeah, I believe the plan - and the SH notice - would have to specify that HCEs don't get it. Even if it is a "maybe" notice I think it has to specify that.

The same way it does for calendar years. In my world, comp is $31,000 so the 415 limit is $31,000.