himt4

Do the family attribution rules (for controlled group purposes) apply between a family member residing outisde the United States who is not an American citizen and a family member residing in the United States?

A company as two branches each covered by its own PS Plan. Each Plan covers about 70 participants. Therefore in total the company has over 100 participants, but again, each plan is under 100 participants. Assuming you meet all the other conditons by having all qualifying assets, do these Plans require IQPA reports?

OK. But even if you file by 3/15, is there any reason why you can't (or shouldn't) also file for an extension as the mere existence of an extension form seems to keep open some options for you?

Thank you. So that seems to be a reason that corps should always file an extension. A lot of clients seem to always want to file by 3/15. Is there a reason for this other than perhaps their CPA's charge for preparing the extension. I guess I am curious as to why some want to file by 3/15 each year.

I guess its the same logic if you were talking about a DB plan that's been around for years and years. If the person already had ten years of participation in a TH DB plan he is maxed out at 20%. So he is also not getting a TH min in his 11th and subsequent years in a TH DB plan. So I guess the sense is once you get a big enough benefit in a DB or DC plan, you dont have to be given TH minimums anymore (as long as your in a DB plan or DB/DC combo). So what is inconsistent is that if your only in a DC plan, you get TH minimums every year and never max out.

Let's say a Corporation with a calendar year Fiscal year and Plan year does not go on extension and files their 2006 tax return by 3/15/07. If they prepare an amended 2006 tax return filing prior to 9/15/07, can they increase the profit sharing deduction that they had taken on the original filing as long as they contribute this increased amount by 9/15/07. Is this allowable/deductible/possible/plausible....?

in reference to post #9, last sentence, the word "jite" used in "jite collar crime" Wasnt sure of this was a typo for "white" as I first thought, or if it was really a word that I wasn't familair with. No definition for jite was found in the various on-line dictionaries, but I did find an old wikipedia entry for jite: "Jite is alternate descriptive expletive for excrement and/or things and situations of little or no value to the observer. It is often heard used by people from the United Kingdom and by U.S. Christians who do not want to use a more coarse and offending cuss word." So typo or not?

How about... If there is no money to fund, pay the 10% penalty . Terminate the Plan now with IRS filing. tell the IRS that the beneficiary(s) of the owner have agreed to take a cut in their benefit to the extent needed to pay all benefits of the Plan. I don't think the IRS ever hits you with a 100% penalty after a Plan terminates. Will this work???

Just thinking...hmmm... And you make sure the plan formula is based on years of participation. And then you put fail safe language into the plan that says that if plan fails 410(b)/ 401(a)(26) then you add to the plan NHCEs from the "excluded class" (i.e. those hired after [date]) in the order of when they were hired until such point that you pass 410(b)/401(a)(26). It looks ok at first look. You've defined an excluded class (i.e those hired after [date]) that does not seem discriminatory, and failsafe language that does not seem discriminatory . But when you think about it, you've essentially changed the statutory one year waiting period to an "as long as it takes until we need you" waiting period. Perhaps you send the plan to the IRS for a determination letter.

"Entry date is first day of the year nearest completion of 1.5 years of service" so if someone was hired 2/17/05, they wouldn't enter until 1/1/07? I don't think that's ok. My understanding is that there is a rule out there that essentially says you cant keep eligible people out of the plan longer than a year and a half after their hire date (unless you're doing the 2 year/ 100% vesting thing). The above example person would be forced to wait 1 year 10 months and 15 days.

not sure I understand the situation. They used 1.5 years waiting period for eligibility, and then entry was exact date that waiting period ended? So if someone was hired 2/17/05, they entered the 8/17/06?

I'll answer first and then someone will undoubtedly correct me. If you are making the point that the two offices are not in a controlled group or affiliated service group situation, then he can get $45,000 from each of the two separate employers plans in 2007 (assumes that he is not eligible for catchup). note #1: for his deferrals in each plan. that is an individual limit, and he cant exceed the 15,500 in total when you add all deferrals together. note #2: a lot of doctors have a 401(k) plan for their 100% owned medical practice, and a 403b at the hospital where they work. In these case, the doc is restricted to the $45,000 in total because a 403b plan is considered to be 100% owned by the participant which automatically puts it in a controlled group with his own practice. I dont think this rule applies to 401k, hence the different answer I gave above.

primarily adding a post here just to send this thread into the exclusive "1000 views club". But since I'm here I'll add a comment. Isnt this like "if a tree falls in the woods..." I mean, If a law comes out with the intention to give combo plans a 31% deduction, but everyone is too scared to take advantage of it, then was there really a 31% deuction law for 2006? The clients who send in their data now are the ones who want to get everything finished early. When you tell them that you can get them a 31% deduction but it contains some risk, they say they dont want to risk it and they dont want to wait for some possible future IRS statement. They say just take 25% and lets finish the 2006 year up.

I am not very up on how this process works. Is there a date set where the IRS issues a statement giving the official interpretation of this rule? When is this going to happen?

To say that the RMD should have been distributed from the 401(k) plan but that there is no 50% penalty if you ultimately take it from the IRA, is essentially saying that you do not need to take it from the 401k plan. Doesn't feel right. Anybody else want to make comment?