Lou S.

Can she take a loan from plan to cover down payment? When she turns 59.5 take an in service distribution and pay off the participant loan early? It's not best idea but it could be a decent work around if you are talking about saving potentially thousands in tax penalties.

I have no IRS citation to provide him but on this one I'm certain of the answer. This may or may not be a good citation if he need back up for the office https://www.irahelp.com/slottreport/age-55-exception-10-early-distribution-penalty

The exception only applies only to the Plan that you separate service from after attainment of age 55. If you roll the funds from that plan to an IRA or another qualified plan they pick up the characteristic of the new vehicle.

^Close for 415 aggregation the "at least 80%" in CG gets replaced with "more than 50%". Since they each have exactly 50%, neither has "more than 50%. It's in the 415 code but I forget which exactly. I think it's 415(h) but I might be off.

Yeah if somehow it is not an ASG you are fine since it's not a controlled group and neither has more than 50% of the LLC so you also don't need to worry about 415 aggregation. However I got the feeling that all profits from LLC flowed back to the corps which makes me think they are sharing employees and trying to get a max SEP deduction/contribution in their own Dentist Corp which probably have both of them as the only employees while not covering any of their staff which is probably a 401(k) deferral only plan. But maybe that's just the cynic in me.

What does the 3rd LLC do? Hard to see a situation where this isn't a classic affiliated service group but maybe I'm missing something.

How does a 1,600 hour requirement satisfy 410(a)(1)(A)(ii)?

^this rule relates to ending a safe harbor match. As for the 3% non-elective, if the correct notice was handed out and the Plan document allows for it, absolutely. The Notice is commonly referred to as "The maybe notice"

I will echo the two above me and add. If she takes a deduction for the 401(k) Plan on her tax return then she's covered by a pension plan and would use those rules for determining deductible IRA contributions. Previously Self-Employed individuals deducted "SEP, SIMPLE and Qualified Plan" Contributions on Page 1 of the 1040, for 2018 going forward I believe it is done on a Schedule 1, line 28, attachment to 1040.

Good question. I do not know the answer when 2 unrelated plans are involved. I do know that if it is one single plan where you exceed the limit than it if the employee is an HCE you include the amount in the ADP test, but if the employee is an NHCE you do not include the amount in the ADP test. Because the the excess is due to two unrelated plans my guess is that you include the amount in the ADP test but I do not have a citation to back that up. Perhaps someone else has something more concrete for you.

If the assets are held in Trust and the plan is qualified under 401(a) I don't see how there is no Trustee(s) of the Trust. But may there is something strange I'm missing.

Well are you talking about a DB plan qualified under 401(a) with the assets held in Trust or a non-qualified deferred comp plan with a DB structure for paying benefits? Or is it a fully insured plan using insurance contracts?

No Walter you first need to be a QSLOB and without 50 or more employees in each entity you don't qualify as a QSLOB. These guys have a nice flowchart on if you can qualify as a QSLOB http://www.boutwellfay.com/wp-content/uploads/2017/11/FAQ-What-is-a-QSLOB.pdf But you have a controlled group with 2 employers with 1 and 5 employees that's not going to qualify as a QSLOB.

I've always approached as a 12-31 of year 3 issue. I believe he had previously reach an RBD and is due and RMD but the RMD is only paid to the extent vested which in this case is $0. So in the third year when he reached 3 years of vesting you have to pay the RMD to the extent vested which at some point in year 3 is going to be 100% vested. I don't have a citation for this so if there is a citation that would allow the RMD to be deferred an additional year into year 4 by 4/1 then I'd be happy to shown that I'm wrong.

If the business owner is still employed, what you are trying to do can be accomplished with a simple in-service distribution provision rather than adding the complexity of tracking small regular periodic payments that not everybody is set up to handle.

I think Bird stated it perfectly.

DOL fact sheet may be helpful. I don't know it has any legal authority but it is a nice guideline https://www.dol.gov/whd/regs/compliance/whdfs22.pdf Here is what it says about "On call time"

I will point out that the article is for IRAs. Plans can be a bit different. I think you have an operational failure that you can correct under VCP (not sure if this one is eligible for self correction). If the participant filed without the 5329, I would assume they would need an amended tax return.

I am not aware of any way for him to legally forfeit his benefits.

Maybe I'm confused but is it possible the new trust agreement was simply a plan amendment? If that's the case you probably have a late SMM if the participants haven't been notified of the change.

Re-run the payroll?

Sounds right Bagwell.

I'd assume you could use "banking purposes" amd as Mike points out you should be able set up the plan without receiving an EIN. We typically put "Applied For" in the EIN field if it is asked for. Also you "probably" won't need the EIN until you have to file the 5500 when assets exceed $250K.

You can apply for an EIN as a sole-proprietor and list the reason as "started retirement plan"

I think you can self correct this with a retro active amendment.