JanetM

Sure, anyone who made over $95,000 in 2005 is HCE in 2006. Doesn't matter that this is plans first year, if the company has been around for a couple years then the look back period is used.

Is company 2 participating employer in compnay 1s plan? Are you saying employees can pick which plan to participate in? That doesn't sound right at all. I think you are saying that 1 ceased all employer and employee contributions. If that is the case, and if 2 is participating ER in 1s Plan, the answer is maybe. You can, if plans are written for it, allow plan to plan transfer between plans when employees transfer from one employer/sponsor to another.

A contribution to a traditional IRA, assuming you qualify, means the contribution reduces your taxable income. This reduces your overall tax bill but does mean you must have the funds available to both make the contribution and pay your taxes. IRS pub 590 explains if you are eligible for traditional IRA. p590_2005.pdf

Thank you pax. Can you confirm that for collectively bargained plans it was the first contract after that? That is my understanding. Union plans has to bargain for it.

Can anyone remember when the required date to amend for ERISA was? Before anyone sends hair-trigger reply, the act was signed into law 9/02/74 but it took a while to write the regulations and there was time for sponsors to amend plans to comply with ERISA. Am thinking is was sometime in 1976 to 78 time frame. I am looking for that date where you had to either have it done or you stayed pre-erisa forever. Thanks in advance!

Years ago when I was in public accounting, we issued the 1099R using the Trustee/gaurdians name FBO child beneficiary and under the kids SSN. That was pre 1997 so I don't know if you still handle it the same.

I can't find anything in CCH about this either, but using some common sense here is what I think. If the minor worked and and had covered compensation eligible for the plan then they received a W-2 for their employment, not the parent or gaurdian. They take distribution from the plan then they get 1099R in their own name.

Read up on sucessor plan rules to see if you will able to terminate & distribute the old plans. You may just end up merging the two into a newly formed plans with old EIN and 002 as plan number. (that is assuming that the current plan is 001).

I would say only the premiums paid are used to impute income to him. But that brings up another interesting point, profit sharing contributions are tax deferred for the participant until they come out of the plan. So this can't be seen as ER or EE pre tax contribution. Is there a 401K to this profit sharing? Why not consider that the premiums paid are paid with after tax contributions. This actually sounds like a terrible plan, almost like tax evaision. Large Tax free distributions from PS plan when you only recognized a very small amount of income.

Are asking how much income to impute for the $250K of company paid life insurance? The imputed income is on the premiums paid by employer for any insured amounts over $50K.

Sure I will, PM me and give me an email address to send it to.

Will you share??????

WDIK, do you have the answers?

Withhold $2,000, that is 20% of gross distribution.

Another point about union, if you do QNEC for some, the ones who don't get it can and will file a grievance and the plan sponsor will have that to deal with. You really have HCEs in a union?

Not sure I understand your quesiton. Entire balance is 10K and 4K of that is loan. Are you distributing entire balance, including the loan as minimum distribution? If gross pay out is 10K on 1099 - than yes the tax is 2,000.

Relius by Sungaurd. License allows me to prepare as many as I want. Have been using it since 1997 and haven't even considered switching.

Ohio and Nebraska come to mind - contributions to caf plan are subject to state and local withholding. (Haven't checked in a while - these could have changed)

I am not saying construction and entertainment industries dont have WL, I am saying they have easier time in changing thier workforce to non union and reducing contributions. Here is example of how it works. We have auto parts plants in OH and AL. OH is union while AL is not. Both plants opened in the 1950s. Both make the same parts and are running at 40 to 50% capacity. Work at the OH is stopped and the AL plant goes to about 95% capacity. We just triggered WL liability. Had we been construction or entertainment industry that would not have happened.

WOW GBurns you have proved Kirk's point about giving your opinion without a bit of knowledge regarding the subject. Please note that mal stated contruction industry. If you have knowledge of ERISA 4203 you would be familiar with the two HUGE exceptions made to withdrawal rules. The rules for "building and construction industy" and the "entertainment industry" are different than the rules for other industry types. Some of us participating in multiemployers are control groups, this makes the rules we play under even more onerous.

GBurns not all trucking companies have high turnover. We have three in the group and they are at less than 5% turnover. Most of that is due to disability or retirement, not job hopping. Depending on the size of the company - the smaller it is the longer it takes to withdraw and not trigger withdrawal. Maybe you should read up on the sections, Multiemployer plans have many quirks.

IMHO, the earnings would seem to be earned in the "normal course of business". As an employee of the firm assistant is simply doing what the business is and getting compensated for it.

That is the heart of it. Once you are in it is virtually impossible to get out a- quickly or b- without going broke. Short of bankrupting the company and fleeing to a foreign country you don't have many options. Options Close up shop and move the compnay to new location that is non union. That triggers complete withdrawal and you can pay it off with the savings you achieve by having inexpensive non union work force. Open new location in non union location and slowly over time as folks leave, retire, or die reduce the number you cover at union location. If you do this slow enough over a long enough period you don't incur withdrawal liability. Key is slow - could take you least 20 years. Open new location in non union location then hire the most incompetent imbeciles as managers and HR/payroll for union location you can find. Make it the worst place to work and soon folks will leave. Note - you will still have withdrawal liability. Believe me - this was all tounge in cheek, but honestly I am stuck in 3 multiemployer plans and I don't see anyway to just pull the plug and get out. At least not at what the union is saying it will cost.

opps - you are correct. Seems they are stuck with keeping the funds in the plan until folk terminate.

Yes you include the loan balance as it is an asset.