Cynchbeast

1. Company A is owned 50% by Company C and 50% by company B ( sorry for the typo in the original question) 2. Dr. Smith (don t know his first name...) is not related to any of the company's A or company C owners 3.Company C is owned 50% by husband and 50% by wife Also note that Dr. Smith 100% owner of company B) is also an employee and receives W2 income) of company A Please let me know if any questions

Facts: Three business entities: Company A, LLC, : Ambulatory Surgical Center (owned 50% /50% by Companies A & B) Company B, a C-Corp: Professional Medical Corporation (owned 100% by Dr. Smith) Company C, an S-Corp: Management Corporation (owned 100% by John and Mary - h/w) QUESTION: Can a qualified pension or profit sharing plan be adopted strictly for the company C (Management Corporation)?

I am studying for my ERPA and one of the topics I need to focus on is EPCRS programs. At some point, I came across a web page that summarized what types of defects can be corrected under SCP, VCP, AuditCAP, but I don't know where that site is. Can anyone provide a link to a good website that will succintly identify what errors are eligible for each program?

I have passed ERPA SEE Part I and am studying for Part II (taking in January). I received something awhile ago about continuing ed - and I couldn't find the answer to my question: Do I have any CE requirements BEFORE I pass Part II and have my ERPA designation?

In reply to both - it is a Profit Sharing and yes, the contribution was made after the PYE but before filing tax return. Our initial response was to treat it as advance contribution for the following year. However, sponsor already deducted the full amount on his tax return. Any creative ideas or does he just have to amend the tax return and pay the additional tax, interest & penalties due.

We have client who contributed and deducted on tax return approx. $10,000 more than 404 limit. Ideas for correcting?

We have plan w/fiscal PYE 09/30/11. Plan is terminated, with all assets distributed. We have everything needed to file final 5500 report now (May, 2011). Can a 5500 report be filed BEFORE the end of the plan year? Is there any reason not to file the 09/30/11 report now?

Top-paid group is top 20% of employees, ranked by earnings, not the top 20% of people otherwise classified as HCE. So your top paid group would be 20% of the total number of employees, and you would have to round up.

We have a client with DB and PS plans. His father (already at RMD age) has accumulated a lot of money in the plan over the years, and we only yesterday found out that in 2007 and 2008 he took out a total of over $530,000 dollars and rolled it over to an IRA. Since we were never told of the distributions, there were, of course, no 1099-Rs preparerd. At this point, both 2007 and 2008 are late. But since all three distributions were rollovers and therefore not taxable events, we felt the best course of action might be no course of action. What are people's thoughts on not preparing 1099-Rs for IRA rollovers???

Well, that's the problem. Plan document says "If there is no designated beneficiary ... the participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the participant’s death." But I can't find anything that tells me how we accomplish this.

A plan participant died in 2002 at age of about 35. Unmarried, no kids, no will, no beneficiary designation, nothing - about all he had was his retirement account and a beat up old truck. Since there was essentially nothing there, the family never formally went through probate or took any legal action. He was taken care of in the end by his brother and sister-in-law, who would like to get his money. The owner of company (plan sponsor) feels very strongly that he would like to get the participant's money to the family. As of yesterday, his total account balance was $382.54. Can they write a check to the participant and let the family do what they want with it? How about writing the check to the "Estate of..."? Any othee suggestions?

I agree w/Kevin. Initially, you only determine catch-up when 402(g) limit is exceeded. ADP test does not included THAT catch-up. But when ADP fails, you may re-characterize as additional catch-up - up to limit - from any give-backs. So for 2008, for instance, ADP test incluldes ALL participant's deferrals up to $15,500, even if some of that gets recharacterized as catch-up after failed ADP test.

Thanks to all. Now I see where Tom was going. But I checked Adoption Agreement, and under Testing Compensation, for determination of ADP/ACP it includes "...any amount which is contributed by the Company pursuant to a salary reduction agreement and which is not includable in the gross income of the Employee under Code sections 125, 402(e)(3), 402(h), 403(b), 132(f) or 457" So again, for argument's sake, let's just assume that the refunds to HCEs were too much. A year and a half after PYE, how do we go about correcting this? Given that the errors are just a little over $100, what would the ramifications be of ignoring the whole thing?

Thank you Tom for your help. But my issue is not with the definition of compensation, so let's just assume the definition of comp in the plan documents includes deferrals and the cafeteria plan. Since we tested on the wrong figures, how do we go about addressing the fact that the HCEs were refunded too much?

Tom - Definition of Comp includes deferrals. So what now?

Give-backs were used to correct failed ADP test for PYE 06/30/07. Our client now informs us that the "Gross Compensation" used on that year's census was miscalculated and was actually net after deducting cafeteria and deferrals. We have rerun calculations with correct gross compensation and the results are that 3 or 4 HCEs were refunded about $104 too much. We are now almost 2 years past PYE. How is this corrected?

My thought is the same. They were never eilgible to make deferrals, so not eligible for SH. But I have never run into this, so what do I know?

We have a New Comp/401(k) requiring Y/E employment for PS. ER making 3% SH contribution and PS of add'l 2% to EEs and max to owner. We have one person term'd in November, 2008 w/over 1,000 hrs and so he is eligible only for SH not for PS. Because of this, the plan does not pass Minimum Allocation Gateway. Does this mean I have to give term'd EE an additional 2% even though he doesn't qualify for PS?

We have a plan with an excluded class of employees, and it passes 410(b) - non-excludable members of the excluded class are considered non-benefitting. Q: Are the otherwise non-excludable members of the excluded class included in the 401(a)(4) general test with a $0.00 allocation or are the omitted from the test? (EX: 10 participants + 2 EEs in excluded class, does 401(a)(4) cover 10 people or all 12 people?

Can the owner's sons be participants in the company's Profit Sharing and 401(k) plans, defer nothing and get a 0% contribution and still be allowed to contribute to their own individual IRAs?

402(g) limit for 2008 is $46,000. If participant defers $15,500 to PS/401k combo, he can get up to an additional $30,500 Profit Sharing (assuming plan passes all required testing). It is our understanding that if he is over 50/eligible for catch-up, we can actually give him $35,500 and re-characterize $5,000 of his deferrals as catch-up. Results: $10,500 Deferrals + $30,500 PS + $5,000 Catch-Up. Q: If instead of one combined plan, the sponsor has the 401(k) and PS as 2 separate plans, can the same thing still be done, or can we no longer use the catch-up in the 401(k) to increase the PS contribution?

402(g) limit for 2008 is $46,000. If participant defers $15,500 to PS/401k combo, he can get up to an additional $30,500 Profit Sharing (assuming plan passes all required testing). It is our understanding that if he is over 50/eligible for catch-up, we can actually give him $35,500 and re-characterize $5,000 of his deferrals as catch-up. Results: $10,500 Deferrals + $30,500 PS + $5,000 Catch-Up. Q: If instead of one combined plan, the sponsor has the 401(k) and PS as 2 separate plans, can the same thing still be done, or can we no longer use the catch-up in the 401(k) to increase the PS contribution?