ombskid

Pension plan with 2 owner-participants. They want to invest plan assets in a closely held corporation that they have personally invested in. Their personal investment is about 1.2% of this corporation. Is this a PT? If so, what party in interest definitions apply?

An accountant called about a plan (no tpa) that got audited. The latest plan document the client has is 2003 ( a GUST prototype). The voluntary program for nonamenders is not available if the plan is under audit. Any idea how steep the penalties run for a one participant plan that has missed GUST and EGTRRA?

Trustees of 2 separate plans, each of which the trustee is also the only participant. They want to buy real estate and flip it. They want to do these as a joint venture of the 2 plans. Can they set up an entity where each plan owns 50% of the entity and each plan invests in that entity and shares the profits? None of the purchases would be debt financed

If they had paid tax on the ps-58 cost, and now cashed in the policy except for the amount of the total ps-58 costs, then distributed the policy (with the ps-58's still in it) to the owner, that transfer would be tax free because the ps-58's are considered basis, and the rest of the account can be rolled over, ultimately to be taxed. If they cash it in now (all of it), it is rolled over and ultimately the whole thing is taxed. Whether or not it is right, wouldn't the amount taxed be the same?

An accountant asked me this question: Small business owner has had life insurance in a profit sharing plan for 15 or so years. No one ever reported PS-58 costs to the accountant and they were never picked up as income. What are the tax ramifications if the plan is terminated? They probably want to cash in the policy (they don't need the insurance) and roll over the account balance.

The answer to your questions is plan-specific and should be outlined in the provisions of the plan. You can make definition of compensation for safe harbor contribution purposes to only include compensation from the date of entry. If the plan does define compensation for safe harbor purposes to only include compensation from date of entry does that satisfy the top heavy minimum for the plan for the year for that participant?

If an employee becomes eligible midyear (1st day of 7th month) in a top heavy safe harbor 401k plan, does a 3% Non elective safe harbor contribution based only on compensation while eligible, satisfy the top heavy requirement for that participant for the year.

The old sponsor resolution is a good idea. Thanks

The LLC sponsor of a profit sharing plan is being closed down, and the principal member is forming a new LLC. They want to continue the existing plan and have the new LLC adopt it. I believe I have seen this done before. Can this be done with just an adopting resolution and a new plan document?

We are taking over a 401(k) plan from a payroll vendor. The client did not file 2009 5500 until mid December. Client included a letter explaining the difficulties with the EAST2 system that was clearly supplied by the former tpa: "This filing was delayed due to the following difficulties with the electronic filing system......" Then listed network, error message, and other problems. So this clearly was NOT a DFVC filing. Now IRS sends a letter proposing a $1500 penalty for the late filing. 2 questions: Does anybody know if there is a way to find out if DOL accepted the reasonable cause and is not going to penalize? It makes a difference as to IF there should be a DFVC filing If the client sends a reasonable cause letter to IRS, and it is rejected, can they still get relief with DFVC Don't you love competing agencies who barely communicate?

Why different for owners?

In general, could a plan limit only participants over 50 to something like "greater of xx% or $XX?

Can a pension plan with an AFTAP<80% make a contribution to increase funding to >80% at any time, and then be able to make routine distributions?

Company A has a 401k plan that currently only has elective deferrals; match is discretionary and has not been made in years. Company B buys Company A mid year. Some Company A employees are paid by divisions of Company B and some continue in Company A. Company A employees deferrals continue to Company A plan until end of year. Plans are merged during following year. Do all compliance tests on Company A use full year Comp and deferrals, regardless of what entity they were paid from? Employees do not have the ability to withdraw and rollover because there is no distributable event, correct?

Can the balance in a SIMPLE IRA be combined with all other IRA's and the RMD taken from any or all IRA's? Or is it treated like a qualified plan and has it's own separate RMD

Thanks. I think there is something about it in Pub 590

An employee is eligible for the first time on 8/1/2009 for the 7/31/2010 fiscal year 401k profit sharing plan. The employee makes no salary deferral contributions. The employer makes a contribution for the employee in January 2011 for the 7/31/2010 year. Is the employee an active participant for w-2 reporting purposes for 2010?

I think common ownership is the only factor, so I was making sure I wasn't missing anything. Thanks

Law Partnership Ketchum & Cheetum LLC has one employee Eloise. Eloise works over 1000 hours in 2003 (or any year). K & C closes it's doors. Ketchum forms Ketchum LLC. Eloise works less than 1000 hours for 3 years. If Ketchum LLC forms a 401(k) plan, does Eloise have to be eligible?

Thanks. I thought it was.

Two partners in a profit sharing plan. They are each others beneficiary. One partner dies. His first RMD would be in 2010. Beneficiary wants to take a partial distribution that would be significantly more than the RMD, then roll over the balance into a beneficiary IRA. RMD is 11,000. He will take 50,000 total. The RMD portion is not subject to mandatory withholding. What about the balance?

This sounds pretty fishy to me.... newegg coupon code iphone 4 cases caribbean resorts It's not clear what sounds fishy.. I'm trying to get an idea of what to do when IRS makes a request for a "missing" 5500 that we know was filed, and now rejects a hard copy in response to their request, and... If DOL's voice system says they don't have the filing, do we proactively send a copy with proof of mailing, or wait till they ask for it. And when they ask, does that disqualify the plan from DFVC?

There it is - in the definitions. This particular plan specifies the assumptions chosen in the adoption agreement for computing the top heavy ratio Thanks

Plan only says present value of accrued benefit

In calculating the present value of accrued benefit of a participant for loan limit purposes, would you use plan rates? Lump sum distribution 417e rates?