kwalified

There is no spouse

Thanks for the response. I don't foresee a prohibited transaction especially if there is only one participant in the plan. The trustee wants to do this by the book.

A hospital employee is concerned that his 457 account balance may be jeopardized if the hospital becomes insolvent. He is considering rolling it over to a 403(b) he has. He is age 70.5. Would it only depend on if the 403(b) allows for 457 rollovers?

A traditional IRA holder has reached age 70.5. When he passes away he plans on leaving the IRA to his children. Will they be required to continue to take RMD's upon their father's death or are they postponed until age 70.5?

A 1 participant plan owns a tract of land. The trustee is wanting to sell a portion of it and wants to ensure it is done properly. I believe it is allowed as long as the proceeds are returned to the trust. Would the remaining portion of the land get a new deed in the name of the plan? Would any special appraisal be necessary?

Thanks for the replies. To add more clarity, no I am not an estate planning attorney and the plan sponsor has one. I am familiar with Ms. Choate. Thanks for the link. Jpod, I believe they are trying to determine what allocation will be made either to children and/or a trust. David, it does mean the accounts of the husband and wife. She has mild dementia and pretty much runs the day to day activities while he handles some of the affairs of the business. RMD's have been ongoing.

A profit sharing plan sponsor has appx 2.5 million in their personal accounts and the couple are in their mid-80's. They will take a hit with estate/inheritance taxes if the funds were ever distributed. They are wanting to establish a trust and make it the contingent beneficiary. I am of the opinion this is permissible, but want to be aware of pitfalls, if any, such a designation would result in. Has anyone had experience naming a charitable trust as a beneficiary?

Update: After an explanation on 5329, the IRS decided in favor of the participant. "no further action was due"

I agree. However, are you aware of a situation where it is beneficial to open multiple ROTHs from one traditional? Thanks

a 59 year old woman currently has a traditional IRA and is interested in converting to one ROTH or a few ROTHS. Due to her age, would this be advisable? If so, would multiple ROTHS be necessary?

Excellent points CuseFan and Jpod. Should be interesting to see how the IRS comments on this

It's good news because his PSP doesn't have the problem. It would have been a much bigger issue had he not been a 5% owner

yes, so family attribution applies. good news

RMD not from the IRA, but the PSP

I'm thinking he could have success requesting a Waiver of the tax on the 5329. My concern now is if he even had to take the RMD since he was not an owner when he turned 70.5.

He WAS an owner of the company. His son currently is 100% owner. He is an officer. The RMD recipient still draws an income from the plan sponsor and hours worked are reported.

True, the holder of the plan assets has been allowing the IRA RMD to be drawn from the qualified plan for the past 4 plan years. Total IRA RMD over that period is $10,530. It was only in the current plan year that they advised that a co mingled RMD could not occur from the plan. I suspect the custodian of his IRA gave him no advice on the IRA RMD. With the excise tax being 50%, could he just throw himself at the mercy of the IRS? Form 5329?

What is the correction method if an owner has been taking his IRA RMD out of his PSP? This has been going on for a few plan years. Amended 1099?

Thank you for your helpful comments.

Merger was effective 6/30/16. Deferrals continued into A's trust until mid-July. Loan payments continued into A's trust until mid-November and final transfer of assets into B's plan occurred 12/1. An extension has NOT been filed. Form 5558 instructions say for a short plan year "for purposes of this return/report, the short plan year ends on the date of the change in the accounting period on the date of the change in the accounting period OR on the complete distribution of assets of the plan" If in fact the merger date of 6/30 should have been the correct plan year end, what recourse would the plan sponsor have for late filing of the extension/5500?

Calendar year large SH 401(Comp. A) merged with new company (Comp B) in 2016. All assets of Comp A were transferred to B by/on 12/1/16. Plan A has until 7/31/17 to file 5558? I am of the opinion the correct plan year end would be 12/1/16 since that is the day the trust of Plan A went to "0"

I'm wanting to revisit this situation....a former employee who has an account in question, is requesting his money. Two notices have been sent to participants whose accounts are being reviewed and the Plan Sponsor has been spending quite a bit of time creating spreadsheets and putting together payroll, W-2's, financial statements, etc. to determine what transpired. The question is can the plan sponsor continue to send the notice every 90 days until the issue is resolved and the accounts can be certified?

It's unknown whether the participant requesting the funds from the account in question (and there are at least two participants) were in cahoots with the employee who was stealing money. However, they never said to the plan sponsor that their deposits seem high compared to what was being taken out of their checks. So there is some suspicion. At the very least there is suspicion that the participants have a higher account balance than the should have whether or not through no fault of their own.

That's what I am thinking that nothing will happen unless the participant initiates it and we have discussed a partial payment until the plan can verify that the participant is entitled to the full amount in his account. The PLAN just went to arbitration. The sponsor does not want to pay out a participant if they are not entitled to it due to a former employee possibly attempting to hide money in participant accounts in order to gain access to it at a later time.

It does. The administrator must provide a claimant with written notification of the administrator's decision relating to a claim within a reasonable period of time(not more than 90 days) after the claim was filed. If special circumstances require an extension to process the claim (which in this case I think it would), the administrator may have an additional period of up to 90 days provided the Administrator provides the claimant with written notice of the extension prior to the termination of the initial 90 day period (which they did not provide the initial response).