masteff

The trustee doesn't provide tax remittance as a service (even if it's for a small fee)?

Nothing would seem to prohibit it in the model amendment to switch a 401(k) to a SIMPLE 401(k). http://benefitslink.com/src/irs/401ksimple.html

I agree. Also note in Pub 502 that if the mother is in a nursing facility, even costs for food and lodging are covered since she's in there for a medical reason.

Two words: state law Estates and probate fall under state law. Some states have provisions that may apply, such as "affidavit of small estate". A competent attorney with adequate knowledge of a particular state's estate and probate laws should be consulted. The burden is really on the estate and estate's beneficiaries to provide you sufficient legal reason to do something other than pay the estate. If they have to keep the estate open for some number of years, that's their problem, not the plans. (Sorry if that seems callous but my job is to protect the plan and its qualified status.)

http://library.clerk.house.gov/reference-files/PPL_107_016_EconomicGrowthandTaxRelief_2001.pdf See Section 643. Generally speaking it must be done as a direct trustee-to-trustee transfer for it to be permitted (ie, a direct rollover, not an indirect rollover).

They probably view it as safer to collect the data than not. If that provision of the law gets repealed then they'd have to go to great expense to collect that data.

This may be helpful too: http://tagdata.com/quotes/household-and-business-employees-401k.htm

You contradict your own intentions... you accelerate the income to the lower tax bracket year but then you want to take extra deductions, which you could delay until 2013 to result in a greater tax savings.

If deferrals were not subject to FICA then a person over age 59 1/2 could potentially use the 401(k) to avoid FICA. Some plans allow unrestricted withdrawals over age 59 1/2 and the 10% early withdrawal penalty ceases to apply at that age. Thus such person could potentially defer the maximum and then withdraw it immediately, bypassing FICA. In your opinion, would it be desirable to let people over age 59 1/2 to game the system to avoid FICA tax?

To repeat myself, this assumes that the money in your 401(k) account is invested in cash and not otherwise invested. If the money was invested, then the money would experience growth and dividends/interest. So if the stock market returned, say, 10% but your loan was at 3.25%, you just lost out on 6.75% of growth. This lost earnings potential is the "opportunity cost" of taking the loan from your 401(k) account. If your 401(k) account is being held in cash, then you seriously need spend time on a site like MotleyFool and learn about investing.

The participant can only choose the source of the loan if the plan permits it (not the software). A fair number of plans specify a hierarchy or absent that do it prorata. As to the double taxation question, as rcline said above, it's faulty logic. See the document from the Federal Reserve in the 2nd link in post #12 of this thread: http://benefitslink.com/boards/index.php?/topic/46277-double-taxation-on-loan-repayment/ (My spreadsheet in post #9 is a useful visual aid too.) As to your plan for taking loans to get rich. 1) you appear to incorrectly assume that you'll always have a higher rate of return from the loan than from other investments (in fact interest rates are so poor right now that nearly any other investment will perform better over the long term). 2) the maximum loan rules will never result in your goal of a continuous loan because subsequent loans may be reduced by the highest outstanding balance in the previous 12 months.

Having had conversation just last night about insurable interests, I got to digging. In large part, state insurance law will prevail on who has an insurable interest. I found it interesting in reading Oklahoma's statute which includes the following: "Life insurance contracts may be entered into in which the person paying the consideration for the insurance has no insurable interest in the life of the individual insured, where charitable, benevolent, educational or religious institutions, or their agencies, are designated as the beneficiaries thereof. In no event shall an individual be named as a beneficiary. In making these contracts, the person paying the premium shall make and sign the application therefor as owner and shall designate a charitable, benevolent, educational, or religious institution, or an agency thereof, as the beneficiary or beneficiaries of the contract. The application or any subsequent change of beneficiary designation shall be signed by the individual whose life is to be insured. These contracts shall be valid and binding among the parties, notwithstanding the absence otherwise of an insurable interest in the life of the individual insured." This also gives us a better answer to the OP's question about having his IRA get part of the proceeds... at least under Oklahoma law, it's expressly prohibited.

I'm not sure that you can do an indirect rollover to another qualified plan. http://www.irs.gov/pub/irs-tege/rollover_chart.pdf

1) You need to talk to your document provider about whether your plan is amended properly to permit in-plan Roth conversions. 2) http://www.irs.gov/pub/irs-tege/rollover_chart.pdf

Is there a medical purpose to the mother moving in (eg, in-home treatment)? See capital expenses on page 6 http://www.irs.gov/pub/irs-pdf/p502.pdf

This might be of some interest: http://www.irs.gov/pub/irs-tege/qab_021406.pdf

Absent language in the plan or election to make it "this time only", then my opinion is it carries over until the participant actively changes it. If you do expire the election then you should fully communicate to participants that they MUST make a new election if they want to defer from their bonus. Your risk is the person who complains later that they didn't understand and demand you fix their bonus deferral or they'll have a hissy fit to a Senior VP. (Not that I've ever had to explain plan or IRS rules to a Sr VP before.)

What you describe appears to qualify as an exception described in 4975(d)(19). You're doing it thru an exchange; based on how I read (d)(19), you're fine.

You may need an amendment to permit an in-plan rollover. Here's an IRS notice on in-plan rollovers. http://www.irs.gov/pub/irs-drop/n-10-84.pdf

I'll agree w/ the signed purchase agreement. An additional document, depending how much of a stickler you want to be, is the "good faith estimate of closing costs" which has a bottom line for money the buyer has to bring to the closing.

I'm thinking you should contact the IRS and the EBSA and get their input. While it's my opinion that it's worse to distribute to a missing participant (causing the money to sit unprotected in limbo) than to miss the MRD, who knows what the govt's opinion is? Another thought is you might research threads on escheat and see if you can glean anything there. This Benefitslink Q&A predates the current 401(a)(9) regs (and lacks the issue of it being a minor): http://benefitslink.com/modperl/qa.cgi?db=...tions&n=110 I guess I still come back to what does the plan say about missing participants and about distributions to minors.

Does the account HAVE to be rolled over? No. Can it be rolled over? Maybe, see Q&A-16 in notice 2007-7 http://www.irs.gov/pub/irs-drop/n-07-07.pdf

So then what does the plan say about payments to minors? Arguably, you haven't "found" the minor bene until you're able to fully comply w/ the plan's requirements to make a distribution. But as Bird said, if you can contact the child, they should be with an adult... and you just have to hope the adult is helpful in resolving it.

You all are forgetting the rules... a non-spouse bene must commence payment either 1) based on life expectancy or 2) failing to start life expectancy in a timely manner must take full payout w/in 5 years. This isn't a 70 1/2 distribution but the 5-year rule. Mother could have been 20 at time of death and we would still have this result today. As to the OP, arguably the lost participant rules supercede (w/out going back to look at the exact text). Follow your standard lost participant protocol.

Generally speaking, it's what is referred to on the health and welfare side as "total and permanent" disability, such as might be determined under Social Security disability or under a long term disability insurance program. http://www.law.cornell.edu/uscode/text/26/72 "(7) Meaning of disabled For purposes of this section, an individual shall be considered to be disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. An individual shall not be considered to be disabled unless he furnishes proof of the existence thereof in such form and manner as the Secretary may require."