Earl

The Tax Court recently ruled in Albert Lemishow v. Commissioner of Internal Revenue, 110 T.C. No. 11 (1998), that a taxpayer receiving a cash distribution from an IRA or Keogh plan must roll it over to an IRA in cash in order to qualify as a tax-free IRA rollover contribution. Mr. Lemishow (the "Taxpayer") received cash distributions from his IRA and Keogh plan accounts which he used to purchase stock. Within 60 days of receiving the cash distributions, the Taxpayer opened a new IRA in which he deposited the newly purchased stock. He did not report the IRA or Keogh plan distributions on his federal income tax return. The IRS determined that the rollover was invalid and therefore, the full amount of the distribution was includable in the Taxpayer's income. The Tax Court agreed, holding that, in order to make a tax-free rollover to an IRA of a distribution from an IRA or qualified retirement plan, the rollover must consist of the same amount of money or the same property that was distributed.

Husband and wife are both in a plan. Husband dies. Can spouse roll to her account in the plan or does it have to be to an IRA? Thank you

I believe the same property distributed in-kind has to be what is rolled over. That's from a memory of a while back. I will see if I can find it again.

I have been using one Trust EIN for multiple plans of the same employer for decades without issue. Just be sure to use the plan name associated with the EIN regardless of where the money was paid from.

Unless Mrs. Smith can be hired to wind things down.

I think the spouse could disclaim within 9 months but she cannot designate who gets her disclaimed benefit. That would be determined by the Plan Document.

Thank you I saw that: "you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased." I guess that means the IRA is the only option?

Mom dies at 99. Son inherits her IRA. Can it be rolled to son's 401k plan? I think...(a lot of possibilities but I can't find anything that says yes or no, explicitly.) Thank you

I think it was distributed. if you don't cash your paycheck it is still taxable. I would file 2016 as the final. I would have no problem explaining what happened after the fact - a check was re-issued.

Thank you. I think the answer is that the problem lies in setting the interest rate on the loan since "the interests of the plans are adverse to each other." Thank you, again. Great knowledge!

it is a one person company. Yes, PS Plans have valuation issues but at least they don't impact minimum funding requirements. The Prohibited Transaction issue is what I am worried about. I don't see how plans fit into the Disqualified Persons/Party In Interest lists so maybe it is ok?

Employer has 2 plans. Can one plan lend the other money for an investment? I don't think a plan fits into the Disqualified Persons list but doesn't seem like it should be ok. (DB Plan to lend to PS Plan for a non-publicly traded investment in land. Trying to keep DB out of the investment due to annual valuation issues.) Thank you

Person made $120,000.40. it is over $120,000 but would the pennies count? thanks

Thank you very much for taking the time to reply. Earl

I have a client with DB & DC (3% SH 401k) Plans that are aggregated for coverage and non-discrimination testing. If I have 2 years for eligibility for the DB and PS Parts, an employee who is 401k & SH eligible gets a 3% of pay SH contribution that also covers TH 3%. Is that employee raised to the minimum Gateway? I hope that is enough information to respond if someone has time. I would have thought this would be discussed but cannot find anything via the Search. Thank you

Figured as much. Have to wait a year to start using the excess assets. Thanks.

An overfunded DB Plan was terminated 10/31/2016. Not everyone has been paid out as of today (2/17/2017) but there is clearly enough money to pay all benefits and then some. I want to use the excess in the PS Plan. Do you think I can use some for 12/31/2016 Profit Sharing or do i have to pay all liabilities first? (So I would have to wait until 12/31/2017 to start using the reversion.) Thank you

Company is being sold. I just found out the owners are actually paid through Management company, Inc. which gets 100% of its income from Operating company, Inc.as a management fee. Same people own 100% of both corps. Management company has not adopted the plan. Operating company takes 100% of the deduction and it is not a 404 problem. Problem is contributions to employees of non-adopting employer. (the owners) Any suggestions on how to fix this?

1.401(a)(4)-5(2) Facts & Circumstances would be the problem, it seems. Plan is a calendar year plan. What would be the numerical testing issue? Thanks again.

The employee will enter 7/1/2017 if Plan is not terminated. The only reason for plan termination would be to avoid employee earning a benefit/having a corp expense. I am not really seeing the discrimination issue. What if employee was scheduled to enter 1/1 and the plan is terminated 12/31. Not the same thing? I guess not due to being within the year?

Thanks. I recommended salary of $53,000 to maximize the PS/401k contribution (with VECs) I appreciate the responses and ideas.

Maybe the better question. My thought was the plan terminated before the employee entered so there would be no testing since they never entered.

Which means you think there is a potential problem? Owner obviously worked, there was $250,000 of profit and she is only employee of corp. Thanks very much for your thoughts.

Corporate DB client has established a high 3 year comp average over $265,000 Has funded plan above value of benefits so having ongoing years of participation is key to use up overfunding Year 4 client wants to know if can take $0 compensation and put profit ($250,000) into plan Question: If plan uses “elapsed time” for eligibility and benefit accruals (not hours) can the participant with $0 compensation still be credited with a year of participation for benefit accruals even though has $0 W-2 compensation..Thank you for any thoughts.

New employee (1st non-owner employee) will enter a DB Plan 7/1/2017. Can I terminate 6/30/2017 and give only the owner a benefit for the year? Thank you