Calavera

Was val date changed to the beginning of the year? Also was 9/30 the plan termination date or the date of final distribution?

Yes

Can they deposit their contribution before 9/15/2021? In this case they can open 2020 calendar year plan and deduct both contributions in 2021.

As I recall, you would calculate the lump sum payment using plan's definitions and administrative practice for age (complete, nearest, exact, etc.) and interpolation . Then you would convert this lump sum amount to a single life annuity and compare with the 415 $ limit, which is the same between 62 and 65. So to convert the lump sum to a single life annuity, I would suggest to be consistent and use the same practice for age and interpolation.

1. Yes you need to do 110% test 2. You test it on a post-distribution basis as remaining asset over the estimated liability for the remaining owner HCE 3. As long as you apply consistent method, I believe it is ok to use ARPA-21 rates as long as you are planning to use ARPA rates for your 2021 valuation.

Lets break it to separate points ignoring W2, since there is no information how W2 is related to his sole proprietorship: 1. Since you supported contribution amount with your BOY valuation, Schedule SB and the 5500 are correct to show contributions. 2. Since he had no Schedule C income, he could not deduct it. 3. So he needs to file the amended tax return that will show no contribution, which will result in additional tax with interest and possible penalties. This has nothing to do with his business account. 4. If he has personal funds to pay these additional taxes, you will not need any in-service distribution. 5. Having in-service distribution to pay taxes is the worst case scenario. The money were not deducted, but you will pay income taxes on in-service distribution. 6. And yes, any sole-proprietor should not make any DB contributions during the plan year, unless he is 200% certain, his net Schedule C income will cover the amount.

1. Since your accruals are larger than the actuarial increase of previous benefits, uniform or non uniform NRA has no difference. 2. I think when regulations say you can ignore actuarial increases, it is for DB only. So 65+5 is the uniform NRA.

To make it more comfortable, a participant may have 2 different commencement dates (month or two apart). Second lump sum will be limited.

Then you are not missing anything.

My take on this that for the PBGC purposes, you have 1 person with benefits as of 12/31/2020. Instruction says that "Beneficiaries and alternate payees are not counted as Participants. However, a deceased Participant will continue to be counted as a Participant if there are one or more beneficiaries or alternate payees who are receiving or have a right to receive benefits earned by the Participant." I would apply the same logic. The cashed out participant is not in the plan, but as of 12/31/2020 there is one alternate payee who has a right to receive benefits earned by the participant. I will not count this alternate payee for the 5500 purposes.

If you are not worried about MRC, why do you need 15 year amortization?

For automatic approval it's either 1/1 or 5/31

=(MIN(D3,3%)*C3)+IF(D3>3%,MIN(MIN(D3,5%)-3%,2%)*0.5*C3)

I may be wrong but, I have a feeling that this post and SEP + Profit Sharing or Cash Balance - 401(k) Plans - BenefitsLink Message Boards are related. If I am correct, note that 6% limit is not applicable for PBGC covered plans.

Just my opinion: If the QDRO language along with the plan document language are not clear whether the AP is entitled to the ER subsidy, I would go with the intent. If in the calculation of death benefits for a participant's beneficiary, the ER subsidy is or would be included, I would give it to the AP as well.

Looks like there could be two different elections: One - to use 15 years amortizations that could be applicable for plan years after 12/31/2018 or 12/31/2019 or 12/31/2020. In absence of election, it will be applicable for plan years after 12/31/2021. Two - not to use new segment rates for any plan year after 12/31/2019 and before 1/1/2022 for either all purposes, or just for AFTAP under Section 436 of the IRC. in absence of election, it will be applicable for plan years after 12/31/2019

I would disagree, and will not treat it as SOB at normal retirement. So plan document states to proceed with late retirement actuarial increases year-by-year For late terminated vested, you should either use "missing payments with interest" or "actuarial equivalent increase", depending on some language in the plan document related to payments, claim procedure, ability of terminated employees to defer until RMD date, and prior practice.

I agree with David that in real life it is subject to "facts and circumstances" The only official reference that I am aware of is coming from EPCRS https://www.irs.gov/pub/irs-drop/rp-19-19.pdf - See section 6.02

I agree with CuseFan that rules are the same for traditional DB or CB plan. Whether you can offset employees benefits to $0 or not depends on whether offset applied to everyone (owners included) or not. https://www.irs.gov/pub/irs-wd/201810008.pdf

I am not aware of post-PPA model language regarding “missed quarterly payments” and “the corrective action”. However here is the pre-PPA language supported by PBGC at that time: Your plan was required to receive a payment from the employer on <list applicable due date(s)>. That payment <has not been made><was made on <list applicable payment date(s)> https://www.pbgc.gov/prac/other-guidance/tu/technical-update-06-3-2006-participant-notice

The lump sum will be $2.9m. In addition, note that the owner should have received a suspension of benefits notice, since somewhere around age 68 he would reach the 415 salary limit and his accrued benefit will not increase. And if he didn't receive the notice, you have a qualification issue.

In addition, if eligible for a lump sum distribution, full lump sum amount will not be allowable for a rollover. Not allowable amount will need to be calculated for two years, 2020 and 2021. If termination will be postponed until next year, then only amount for 2021 will need to be calculated.

If auditor's report is not available, you should file your Form 5500 without attaching anything in place of this report. You will leave 3(a), 3(b), and 3(d) blank, but still fill out 3(c). I would also suggest attaching explanation why the report is not available as the Other attachment. See Q25 here: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/efast2-form-5500-processing.pdf The current answer is short, but back in 2014 it looked like this: Q25: Will the EFAST2 system still receive my filing if I do not attach the IQPA report with my Form 5500 annual return/report when it is required? The EFAST2 system will receive your filing, but submitting the annual return/report without the required IQPA report is an incomplete filing, and the incomplete filing may be subject to further review, correspondence, rejection, and assessment of civil penalties. Also, if you do not submit the required IQPA report, you must still correctly answer the IQPA questions on Schedule H, line 3. This means you must leave lines 3a and 3b blank because the IQPA report is not attached and must also leave line 3d blank because the reason the IQPA reports is not attached (i.e., was not completed on time) is not a reason listed in any of the available check boxes. You should still complete line 3c if you can identify the plan’s IQPA. Please note that failing to include the required IQPA report and leaving parts of line 3 blank will result in the system status indicating that there is an error with your filing because, as noted above, submitting your annual return/report without a required IQPA report is an incomplete filing, and may be subject to further review, correspondence, rejection, and assessment of civil penalties. Thus, if you find it necessary to file a Form 5500 without the required IQPA report, you must correct that error as soon as possible. And yes, after this filing the plan sponsor will receive letter granting either 30 or 45 days to complete filing with the report attached. Obviously it is even better to file amended form with the auditor's report before DOL issues the letter.

I would probably answer "No other" and provide explanation.

What I was trying to say that if a sole proprietor, decided to continue his business as a corporation, I would treat it as a continuation of the same business and add earnings together. However if a sole-proprietor created a corporation for a different line of business, I would account for income separately and use 0 if there is a loss.