masteff

Use code G, just like direct rollover to a traditional IRA. The participant reports the conversion on their personal tax return.

Follow David's suggestion above. Also ask them to show you what they have that says Federal law requires deferrals stop while a loan is outstanding. You probably should also ask them to verify that they processed it as a loan and not a withdrawal. Your situation is a long way from being to the degree of correction that you're asking about (and that info applies a slightly different aspect to boot).

And to continue deferral of otherwise taxable income. You may see it as simply moving the money from one tax deferred pot to another, but the reality of it is that one part of the IRS Code says when you can take a distribution from your 403, another part of the IRS Code says when that distribution is "rollover eligible" and a third part of the IRS Code says that when you do the rollover properly then you can continue to defer the income and tax. It's not a "certainty" that the IRS will declare your rollover to be a sham; but it is a legitimate and documented "risk". As such, we can't give you anything concrete to show your employer to make them okay w/ your proposal. However, J Simmons' cited case does show what the IRS considers to be a sufficient break; it could likely be a shorter time and still be okay but we can point to that 4 months w/ some level of comfort. A quick glance at the calendar shows if you took a break from working this Fall, at least you'd get the Holidays off!

Form 5305-SEP IRS Pub 560 It may be elaborated on in Prop Reg 1.408-7 but I can't seem to find a link for that.

No, what matters is what the IRS and the Tax Courts determine to be a "sham transaction". To get a better idea of what we're talking about, try a Google search on the three words: tax sham transaction

On a slightly different vein... how does your employer treat the termination for things like seniority, vacation eligiblity, service awards, sick leave, etc? My current (non-union) employer starts employees over just like a new hire, so you'd drop back to zero days of service, meaning have to wait a full year to restart vacation, no seniority, no service awards, no sick leave, etc. Make sure you understand what happens to all perks and benefits before you do something that can't be undone.

In a recent case, some airline pilots got divorced so their wives get money from their retirement accounts as part of the settlement. The IRS came in and the tax courts agreed that the divorces were shams because the pilots got remarried to their wives and had that intention from the very beginning of the process. This is substantially what you propose to do... create an event which allows distribution w/ the full intent of reverting back afterwards. Unless you're paying a flat fee for advice, remember that this person has a financial incentive (namely commissions and fees) to push you to take this action. You're consultant won't be the one who's hurt if the 403 gets in trouble w/ the IRS. But be very aware that if the IRS says the rollover was a sham, then the entire amount will be immediately taxable to you (plus penalties and interest).

Everyone please NOTE: Golden Girl found an OLD thread from 1999. The RULES recently CHANGED making the old information in the first several posts OBSOLETE. Please be sure to look at the dates on prior posts before relying on that information as laws are subject to change.

I agree.

Might take another look at line 16 on that form... consider what amount would be forfeited. You might walkthru the form w/ a different scenario... like electing $2000 and only using $1500.

Although I've only been to my local Hooters twice, I can assure ya'll that the local employees would likely think that actuarial science is the opposite of theoretical science... as in, what actually happened versus that theory stuff.

Could you distribute in-kind (even it required an amendment, possibly restricting in-kind to illiquid assets)?

"Never argue with a fool, onlookers may not be able to tell the difference." - Attributed to Mark Twain First off, this is generally a polite and courteous forum. Even "heated" debates manage to stay w/in the bounds of general decorum. However, all forums are subject to the occassional person who posts for the simple sake of argument or, worse, for the simple sake of getting a rise out of another poster. A person making posts like that is sometimes referred to as a "troll". The best way to respond to a troll is to not reply at all. Rather, if a post is sufficiently inappropriate, then use the "Report" button on the lower left side of the post.

Generally speaking w/ Roths, a loss can only be claimed if the entire Roth is closed out. Not sure if there's specific guidance on how that principle applies to the Roth 401(k).

Yes, it matters 110%. If no funds whatsoever in the DB plan, then nothing could have been distributed from the plan, so then it can't be rolled over by simple definition of rollover eligible distribution. From the financial perspective of the rollover, the money is fungible. However, the 60-day rule is pretty exacting, so verify the date it left the plan and the date it went into the IRA.

1) I agree w/ the plan's interpretation re: the division of interest. "Accumulated" is a semi-jargon word in the financial/accounting profession and therefore potentially different from your personal expectation. As rcline said, if you revise, use different words. 2) You still have one fatal flaw... the plan does not, nor will ever have, the balance as of 2/21/91. In my former job, I'd recommend rejecting your DRO because the plan can't physically comply w/ the calculation required. I agree w/ Bird. You should either 1) specify what exact $ amount to use for the starting figure or 2) just do the calc yourself and remove any guess work from the plan sponsor. So either: The interest of the alternate payee will be 50% of the difference between $starting_amount and the account balance as of date2, said amount to be adjusted by any gains or losses on said amount from date2 until distribution or segregation. or: The interest of the alternate payee will be $exact_amount as of date2, said amount to be adjusted by any gains or losses on said amount from date2 until distribution or segregation.

Control group speaks to common ownership, not to similarities/differences of business structure or activity (unless someone thinks you could make QSLOB work). The only real question is what percent of the S-corp does he own?

You prove you have proper and reliable procedures for providing the information to the newly eligible employee, not that you forced them to sign a form electing zero.

But most employees who have a zero election are the ones who simply never returned an enrollment form. There's no mandate to track down your employee and make them sign a zero deferral election. That's simply the plan default. Now if you have automatic enrollment, then it's a different story because you'd have an active election for them to be at zero instead of the automatic default. But don't ignore the fact that I can allow my employees to make deferral elections via electronic means (assuming I otherwise comply w/ the appropriate regs). During my 8 years of 401(k) administration, the only written election we ever accepted was from a new CEO. Everyone else was directed to the internet (even if it meant sitting w/ them personally to walk them thru how to use the website). Oh, and a few employees w/ zero deferral are a result of suspension due hardship withdrawals; won't have a form on them because the change is automatic per the plan and law.

I see nothing in IRS Pubs 571 and 575, nor IRS Form 5329, that gives it an exception to the penalty.

See the discussion currently going on in this thread: http://benefitslink.com/boards/index.php?s...c=42659&hl=

Looking at IRS Pub 570, my opinion is if US citizen, the proceed basically as normal. If not US citizen, then get W-8BEN. Most residents of Puerto Rico are US citizens so I'd generally proceed on that presumption. And I don't see anything to contradict applicability of automatic rollover in this situation.

Try this thread, not specific cites but some good discussion (mainly on the 1st page): http://benefitslink.com/boards/index.php?showtopic=41319

Unless I misunderstand the process of emancipation, the child becoming emancipated would likely be a loss of eligibility and therefore a reason to drop the dependent. But... are you still w/in the time window to allow a change (your post is vague on how long it's been since the termination of the order)?

Because for day care, I can't be reimbursed for more than I've put in so far. If day care cost $30/month for 8 months (total of $240) and I only put $20/month into the plan, I'd be in the negative for the last 4 months of the year waiting for contributions to catch up to my already incurred expenses. If I can change my election to match my expenditure, then I'm rarely less than 1 month out of balance.