R. Butler

Plan sponsor is taxed as a partnership. Plan sponsor uses a recordkeeper platform for their 401(k). A few of the partners had 401(k) contributions that exceeded $24,000 deposited to their accounts during 2016. It wasn't noticed until after 04/15. Since they are partners and not W-2 employees can this be corrected by forfeiting the excess amount? Just trying to avoid the double taxation; potentially they can be made whole outside of the plan. Thank you for any guidance.

Plan counts prevailing wage in the ADP test up to the applicable limits. Immediate entry for prevailing wage, but one year wait for employee deferrals. Can plan include the those employees who received a prevailing wage contribution, but who are not eligible to make deferrals in the ADP test? I don't think so, but I could be wrong. Thanks in advance for any guidance.

Yes, but that isn't the question. The question is whether he can come up with the funds apart from the policy and roll that cash over? Thank you for your input.

Participant held life insurance within a retirement plan. The rep. on the policies advised the participant that the policies should be transferred to the participant and the participant followed that advise. Fortunately participant is over 59 1/2 and had a distributable event. However, the participant was not aware that the transfer constituted a taxable distribution. We are still within 60 days of the transfer. if the participant has sufficient outside assets can he contribute an amount to an IRA equal to the cash value less the basis and treat it as an indirect rollover? Thanks for any guidance.

Co. A acquires in Co. B in 2016. Co. A's plan grants predecessor service with Co. B for eligibility purposes. Co. B had a plan that was into Co. A's plan at acquisition. John Doe worked for Co. B from 2001 through 2005 and participated in Co. B' s plan. John Doe is rehired in 2017. We are trying to determine whether he is immediately eligible. Co. A's plan document provides that after five consecutive one year breaks in service, rehired participants are immediately eligible if they had any nonforfeitable interest in the Plan to employer money. Would "Plan" generally include Co. B's plan which at this point has gone away. My inclination is yes because it was merged into Co. A's plan, but I'm not 100% sure about that. Thanks in advance for any guidance.

Person A dies in 2016 after taking his required minimum distribution. The beneficiaries are his two children. As of 12/31/16 the account had not yet been divided into separate accounts. It is my understanding that for 2017 he RMD is based on the oldest child's life expectancy and that a separate calculation is not required for each child. Am I correct on that? Thank you for any guidance.

Health & welfare plan has always had to file a 5500 because they were over 100 participants. At the beginning of 2016 they dropped down to 85 participants. Generally they would not have to file a 5500, but does the fact that they had filed in prior years necessitate that they continue to file? Thank you for any guidance.

100% owner wants to roll his traditional IRA into his 401(k). Assuming the plan accepts rollovers from IRAs I don't see why he can't do that, but his CPA is telling him that owners can't roll IRAs into their company's 401(k). Am I missing something? Thanks for any guidance.

Top heavy minimum contributions were required for 2015, but they were not made until December 2016. Are lost earnings required in this case. If so what is the loss date? I can' find anything that specifically spells this out. Thanks for any guidance.

Not on this situation because all assets weren't distributed, but if it was a merger situation you would. Would that change the answer?

Why wouldn't it? If a resolution is prepared indicating that the plan terminated on 08/04. If all contributions to the plan ceased as of 08/04; you complete the ADP testing on a short year basis. What is the basis for asserting that you have until 03/15 under these circumstances? Is the assertion that the plan didn't terminate until all assets were distributed? If that is the assertion then does the answer change if the plan sponsor was acquired, terminated their plan and them the assets were merged into the acquiring company's plan? In that case the plan doesn't have assets after they are merged. Would that start the 2 1/2 month distribution period? Thanks for any guidance.

Calendar year plan terminates August 4th. The plan failed the ADP test. Refunds made in December. Plan sponsor is being told that the excise tax normally assessed on refunds made more than 2 1/2 months after the end of the plan year would not apply. They are being told that even though the plan terminated creating a short plan year that the normal 03/15 deadline for calendar year plan still applies. I don't find anything that indicates that the excise tax isn't required in the is circumstance. Am I missing something? Thank you for your help.

Participant terminates employment in 2008. Receives a distribution, including surrendering a life insurance policy that he had in he plan. Participant dies in 2013. His named beneficiary dies in 2014. The plan received a dividend check a few weeks ago on this policy. Essentially the insurance company overbilled on the premiums and is refunding about $1,000. Who gets the money? Had the money been in the plan at the time of the participant's death then it would have passed to the beneficiary, but it wasn't. It wasn't in the plan until after both the participant and the beneficiary died. Does it now go to the participant's contingent beneficiary or still pass to the original beneficiary's estate? Thanks in advance for any guidance.

Co. A acquires Co. B in an asset acquisition in November 2015. Co. B sponsored a plan, but the plan was terminated at acquisition. Some participants did roll their balances into Co. A, but rollovers didn't actually occur until January and February of 2016. Bob was 72 at the time of the acquisition, but still employed. He terminates in July 2016. A couple of RMD issues: 1. It is my understanding that there would not be a 2016 rmd for Bob. He did not have a balance in Co. A's plan at 12/31/15. 2. Should have Co. B's plan issued an rmd for 2015? My understanding is yes because the employer changed at Co. B's acquisition. Thanks in advance for any guidance.

Service provider failed to file an extension for a calendar year plan. Plan sponsor is a fiscal year taxpayer (3/31 year end). Can plan sponsor still rely on the corporate tax extension to extend 5500 deadline to 10/17? Thanks for any guidance.

Thank you. That was my understanding, but I was a little cautious that I was missing something. Just seemed to easy. Thank you again.

Plan sponsor currently maintains a 403(b) plan, deferrals only. Plan Sponsor wants to adopt safe harbor provisions. Is it permissible for plan sponsor to terminate the 403(b) and adopt a new safe harbor 401(k) mid-year? I'm not clear enough on 403(b) rules to know if I am going to run into issues. Thanks in advance for any guidance.

Participant invests in a hedge fund set up as partnership. The partnership agreement provides that 20% of the income apportioned to the limited partners (participant) should be allocated to the general partner. The don't call this a fee, but rather an incentive allocation. I understand the difference from a tax perspective, but for 5500 purposes do we call that incentive allocation a fee? Thanks in advance for any guidance.

Co. A is a for profit service org. Co. B is a not-for-profit service org. The owners of Co. A are the directors of Co. B Co. A and Co. B perform the same type of service just for different clients Co. A and Co. B share office space and a handful of employees. I'm trying to determine whether this a controlled group. It smells like one, but I'm not sure that I see it by the definitions. Not an A-Org. because there is no ownership interest in an FSO. Not a B-Org. because there are no services provided for an FSO or A-org. Not sure yet how the directors are appointed to Co. B, but unless they are appointed or controlled by another 501©(3) I don't see a controlled group. Am I missing anything Thanks for any guidance.

I was a able to find a little more the past few minutes. I think if they file through VCP and request that the SIMPLE IRA contributions be allowed to remain they will be okay with that part. Any thoughts on whether contributions made to and opportunities to participate in the 401(k) plan will mitigate corrective contribution that may have to be made for the Co. Z employees would still be appreciated. Thank you

I'm going to research the boards on my own too, but as usual the person asking needs an answer in 20 minutes. Person A owns 100% of Co. Y and 100% of Co. Z Co Y has had a SIMPLE IRA for years Co Z has had a 401(k) for years That is a no-no. We're trying to help him fix the SIMPLE IRA first. I know you can file through VCP, but I'm not sure of the end result. The SIMPLE IRA excluded eligible employees and under VCP corrective contributions have to be made. Two questions: 1. Would the IRS consider the contributions made to the 401(k) on behalf of Co. Z employees as corrective contributions? 2. If Co. Z makes corrective contributions for the SIMPLE IRA failure, won't they be tainted since they sponsored a 401(k) in those years? Thanks for any guidance

Never mind. I found my answer. Thanks

Retirement plan has whole life insurance policies within the plan. (Life insruance in the plan is a bad idea if you ask me, but the plan sposnor didn't ask me.) Simple example -- Participant terminates with a an invetsment balance of $80,000 and a life insurance policy with a cash value of $20,000. Participant is going to rollover the $80,000 and wants the life insurance transferred to her. Can the plan sponsor have the insurance transferred without withholding the 20% tax or does the tax have to be paid at the time of transfer? Thanks for any guidance.

Large insurance company pays compensation to both the agent directly and to an S-Corp. owned by the agent. Agent partiicpates in the insurance companies plan based on the wages paid direclty to him by the insurance company Agent wants the S-Corp. to adopt a SEP and receive a SEP contribution based on his W-2 wages that he pays himself from the SEP. Any reason he can't do that? I don't see an issue right off, but that pay scenario confuses me. Thanks in advance for any guidance

Co. A owned 100% by Person Z. W,X & Y are the employees. Co. A sponsors a 401(k) plan. Person Z (90% ownership) partners with Person Y (10% onwership) to form Co. B. There are not any employees other than Y & Z. Co. B does not adopt Co. A's plan. It is my understanding that Person Y is an hce in the Co. A 401(k) plan because of his ownership in Co. B and the fact that Co. B is not a participating employer does not change that determination. Am I missing anything? Thanks for any guidance.