Alf

You can still make 2004 contributions until your tax return due date, can't you? The contribution coudl be for 2004 or 2005 compensation, but not earlier.

Ours is a hardship Q, but may be an issue for other distributions. Non-rollover, of course. We assume it violates anti-assignment or alienation to make out distribution check to thrid party (escrow agent for hardship on principal residence or mortgage company for forclosure). Others have stated that since withholding goes to IRS, that it is ok to make the check out to someone esle. Ultimately we want to prevent the participant from taking hardship money and spending it on something else and using the same hardshp reason again in the future (We know the hardship part is a different issue and have limited the number of hardships available per year to indirectly address the question). Is the anti-alienation response too uptight?

We think they will extend the amendment date. The effective date is statutory and all Treasury can do is delay enforcement and amendment dates.

SEP won't work because they don't want the custodial diligence/oversight of all the prohibited transactions, er . . I mean "investments." If the contributions aren't higher for a (k), why are solo 401(k) such a rage if a profit sharing plan gets solos to the same place. I figured that I was missing something.

Is there any reason for a one participant plan sponsored by a sole proprietor to NOT have a 401(k) feature nowdays instead of being a basic profit sharing plan?

Wow. Lots of confusion here? Deemed Roths are ok. The are not a BRF, but this may be just a pass on the 401(a)(4) current availability requirement so employers don't have to worry about actual overall usage of the Roth feature. I don't think ADP applies and assume that everyone (including me) is getting these confused with the Roth 401(k)s that will be available in 2006. From wha tI understand to be the law, you should be able to use deemed IRAs in the family situation described in the original post.

Because of the AGI limits, this question doesn't come up. Do you really have an HCE who is eligible for Roths?

RP 2004-25 states "the remedial amendment period with respect to all disqualifying provisions of new plans, that is, plans that have been put into effect after December 31, 2001, and all plan amendments adopted after December 31, 2001, that would cause an existing plan to become disqualified, will not end earlier than the EGTRRA remedial amendment period." We understand that this is as broad as the GUST rule was which included all plan changes, even non-law change related ones.

Ok, I think I see what bothers me about these. Is there another problem with this? Is the car used esclusively for obtaining treatment or care? If that is not relavant, can large-print books be reimbursed for the sight impared or wheelchair ramps or wide doorway modifications for those in wheelchairs? We don't think of our FSA as a source of funds for all of the living expenses or modifications necessary for functioning in society. Should we? Shouldn't the starter be necessary for obtaining medical care to be reimbursable?

Yes. 457(f) technically.

Definitely 2 5330s, but there are two PTs for 2005 (the 2005 5330 will have two entries904 and 05).

Send all in.

1) You don't want to wait until 2011 to find out that you have to correct 2004 allocations. Just because the IRS will allow you in 2011 to go back 7 years doesn't mean you want to. If there is a chance that he IRS will require retro changes I want to know about it sooner rather than later. 2) Your application should still be pending when the IRS opens EGTRRA and they should allow you to convert it to add EGTRRA.

Compared with informal oral comments at benefit conferences, I thought that the quote from the proposed regulations was relevant to the posted question and very helpful.

The goal is to put the plan back in the same position as if the error had not occured, so it is ok as long as forfeitures are not reallocated.

I smell a 411(d)(6) cutback unless it is just going in for new benefits.

Sure. My comment that it not be part of a prearranged deal was intended to pick up the general PT prohibitions. Real Estate is so hot right now that everybody is doing this and I have got to believe that taxpayers that follow the letter of the law (including the general or indirect PT rules) are going to be ok.

Need to know what they are going to do with the land, how much the son will own, and who they are going to eventually sell to. If the plan buys first (not prearranged deal) and they don't use the land the acquisition is almost certainly not a PT.

Not if publicly traded.

NV stock can be designed within the one class of stock rule for S Corporations, but that is still an important issue to address because losing S status for an ESOP changes alot. Diversification only applies to the QES in this context. The NV stock will be treated as just another non-QES asset.

Fully insured plan. If a qualifying event COBRA notice is not sent by the deadline, should an employer/administrator send one out asap or just hide? This is the only fix we can think of to avoid potentionally unlimited exposure on claims, but it really raises a red flag. Any tips on explaining this to the insurance company or ideas about whether we will get it covered? Is there some point that this doesn't make sense (what if one year late, for example). We assume that the qualified beneficiaries can be required to pay for any elapsed premiums (the deadline for these arrearages is unanswered apparently), but at some point, the past premiums get pretty high. Any general thoughts would be appreciated!

Add: final DOL claims procedures; EGTRRA; JCWAA; and Rev. Rul. 2002-27. The only other fee I can think of is the user fee for the IRS determination letter fee if you decide that has to be included with the VCP. Although it is a standardized prototype, you may want to (have to?) include a determination letter application.

The loan repayment stays at the corporate (plan sponsor) level until: distributed as a dividend or the corporation liquidates.

If the note is paid off with cash, it is just the coversion of one balance sheet asset (note receivable) to another (cash). The valuation of the company must have already taken the value of the asset into account and the fact that is changes from a receivable to cash doesn't matter at all. Lots of deals don't pan out great, so I have to ask - Is the acquisition consideration going to cover the note?

I don't know about you, but our Flex plan administrators don't get paid enough to do calculations like that. Definitely worth remembering this issue (whichever way the employer wants it to go) when restating/drafting the flex plan next time. So, Kirk, what is your answer on the car starter?