ETA Consulting LLC

Backtaxes should be considered part of the purchase price (within obvious reason). If you have $40K in backtaxes on a $20K house, then that would clearly undermine the intent of "purchasing a primary residence". But, if $30K would make the purchase happen, then that should qualify. Documentation is key. It has to 'pass the muster'. Good Luck!

He'd have to wait until 59 1/2 for "Elective Deferrals". The NRA age withdrawal is for in-service distributions from pension (i.e. Money Purchase) plans; meaning you cannot take one until the earlier of age 62 or NRA. Good Luck!

Yes. As long as each plan passes coverage as a stand-alone plan; they are fine. Good Luck!

1) You must follow the terms of the plan. 2) You may not retroactively amend a plan to conform to an operation. Exceptions: When the plan's provisions are inconsistent with the Treasury Regulations, then you must adhere to the Regs. Typically, when the law changes, the IRS will allow to you to operate the plan under the new rules while amending the plan at a later point in time. Several EPCRS items will allow you to retroactively amend the plan to conform to an operation. Keep in mind that exceptions are just that; exceptions. You will, generally, not want to arbitrarily operate the plan differently while amending later. Good Luck!

No. Designated Roth accounts may be rolled only into Roth IRAs or other Designated Roth Accounts. Good Luck!

A few years ago, the IRS changed the rules allowing individuals to take the after-tax only portion while directly rolling the earnings to an IRA. Per the current rule, whenever an amount is rolled while a portion is received in cash, the basis will be split (prorata) between the rollover and the distribution. The only way to achieve your objective would be to take the entire distribution in cash and then roll over the earnings. This creates an issue with the mandatory 20% withholding on the pre-tax portion of the distribution. I forgot the ruling, but would imagine all special tax notices have been updated with the current language. Good Luck!

An employee shall not be treated as meeting the age and service requirements described in this paragraph until the first date on which, under the plan, any employee with the same age and service would be eligible to commence participation in the plan. My contention was that this provision "may" or "may not" apply when separate testing for ADP/ACP. However, when separate testing for non-elective, then you must use the plan entry. Not sure if this is what you're getting at. Good Luck!

You should treat each vehicle as if the other doesn't exist for testing purposes. Obviously, you don't want to exceed 402(g), but the ADP test for one is totally exclusive of the other. Keep in mind that when testing for the DPL under the SAR-SEP, each HCE is limited to 1.25 times the average of eligible NHCEs. This rules out any notion of combined testing with a 401(k); as the 401(k) averages both HCEs and NHCEs. Good Luck!

The appropriate question is for what purposes are you disaggregating? When you're disaggregating for non-elective purposes, then you must use plan entry dates (there is no debate). The issue comes when you are disaggregating for ADP/ACP (where praticioners typically use semi-annual dates, which is often debatable). Good Luck!

They can't, the best they could do is assume that amount is the compensation. For instance, you cannot write a check for $200 while saying you made only $100 in tips. A large part depends on what the employee is willing to report; since that is the major exception to not deferring from compensation that has already been received. Their is some program (process) utilized by restaurants to deal with this operation, but it isn't close to being fool proof. Good Luck!

It's only the DB plans that have until April 2012. Assuming you are referring to a DC plan, they are likely past their restatement deadling (April 2010). Good Luck!

The determination date for 2011 is December 31, 2010; so you're automatically doing a prior year determination. It's semantics. Does this help?

Of course, he is. He is a 100% owner of one of the adopting employers of the plan. That, alone, makes him an HCE. Good Luck!

Sure. They have compensation from a US Source, so they wouldn't fall under the statutory exclusion. Business as usual. Good Luck!

I don't remember, but I'll ask them to verify whether they need this information from qualified plan accounts. I know they'll have to provide it for brokerage accounts (i.e. IRAs). I don't remember them having to get duplicate statements from individual account plans where the assets are held within a trust. I think you are correct, but I'd ask them to verify the requirement. Good Luck!

Sure. The rules apply separately to each population. So, when one population has only one employee, then that population automatically passes. Of course, you can elect to test the HCE with the non-excludable population, but you don't have to. Good Luck!

That is a good one. I'd say they are still included in the ACP test. When you look at the language, "would receive a match if you are to defer" the withdrawal feature is merely treating the participant as if he did not defer. Hence, he would have received the match had he actually deferred and left the funds there. Good Luck!

He should enter the plan on his date of rehire. He had already met the age and service requirements previously. Also, not sure if the rule of parity comes into plan as I think it applies only to participants (though, I could be mistaken). Since he never entered the plan, he wouldn't lose that service (just something worth verifying). Also, many plans do not even use the rules of parity; something else to verify. Good Luck!

As a participant in the plan, he is assured of the same rights to distribution as anyone else. If such cite requiring him to receive his distribution last existed, it would be included in the plan document. He's still responsible for ensuring the other participants rights are protected until the final assets are distributed. Good Luck!

I agree with you. You're still within the remedial amendment period. You just won't have reliance on an opinion letter for many of the new provisions in case the good-faith amendments were not drafted correctly. Generally, the good-faith are on par; so there shouldn't be an issue. I'd do it. Good Luck!

You know if you write a death benefit into the plan (i.e. life insurance payout up to 100 times monthly benefit and is offset by the QPSA amount), then this will apply to all employees. Otherwise, the life insurance benefit, itself, will be discriminatory. Your question appears whether the trust, itself, can own a life insurance policy on the business owner when there is no death benefit offered under the plan. I think it "may", but in very modest amounts. Suppose the plan is underfunded. Being a small employer, this plan will terminate underfunded should the business owner die. It may be prudent to invest in a life policy to ensure the plan is adequately funded in the event the business owner dies prior to actually fully funding the plan in future years. This will ensure the payout of the full benefit under the written terms of the plan to all employees. The key is that the life policy, itself, cannot be used to benefit the owner as a individual under the plan, but "may" be done for the plan as a whole. Good Luck!

I would agree with you. Good Luck!

When the participant dies, the plan beneficiary becomes entitled to all assets in the participant's account. The only thing the excess does is to say that these funds are not allowed to remain in the plan. On what authority would you distribute to anyone other than the designated beneficiary. Good Luck!

The excess should be paid to his beneficiary under the plan. Good Luck!

No. Both must meet the requirements. Good Luck!