Blinky the 3-eyed Fish

It will also define a whole lot of other terms, but I doubt that will answer your question. You are correct that 404 is based on compensation paid in the fiscal year. To compute what compensation you use, you need to know for what year the deduction is being taken and the compensation of those benefiting paid in the fiscal year of the year of deduction, i.e. the latter of your choice.

The individual is the taxpayer in this case. Just think of how the LLC taxed as a partnership works for the LLC members. The income and expense of the entity is divided up appropriately and flows through to the K-1's, which are then part of the individual's tax return.

I don't see this as an ADEA issue regardless of whether it applies or not. You aren't going to exclude all people 49 and above are you? Instead you will exclude him by name or job classification, right?

Have her take a loan. You can't repay a hardship. If she can't take a loan, are in-service distributions available? She could effectively "borrow" the money for 60 days under that scenario.

None.

You can't fund the balance necessarily. It's not PBGC covered.

The IRS is fully aware of how the cross-tested plans work for partnerships and they are fully aware of document language that puts everyone in their own rate group. The spirit of the law is not going to contact Mike because it was run over by the truckloads of people that didn't see it. The short of it is that if the IRS wishes people not to design and administer plans like this, then they will issue guidance to stop it. For now, they are okay with it, so I say have at it if you want.

I would doubt that Fidelity could do anything actuarial. Submitting a DB plan for plan termination would require actuarial calculations. If the plan assets are less that the PVAB, the partcipant could take just the assets in the plan by waiving benefits. If the plan assets are greater than the PVAB, then the participant can receive the excess amounts provided the document says (or is amended to say) that excess monies go to participants and are not reverted to the employer. Of course all payouts must be within the 415 limits.

Restating versus amending is simply a decision on which is easier. It might be very difficult to incorporate all the matching provisions accurately in an amendment. This is one reason that a discretionary matching provision should nearly always be put into a 401(k) document from the onset. The client could simply choose not to use the feature but has it there if they change their mind.

I didn't specifically look to see what you mean by your cites so I am not sure if you have the concept, but in determining earned income for a single member of the LLC you are only going to consider their share of the ancillary contribution and their allocation. No Yes, earned income is compensation for self-employed persons. Just think as to what the answer would be if there were no ancillary employees. If you couldn't include the compensation, you couldn't have a retirement plan in that situation. No, why would you think that?

One other note. When going under the DFVC program, you are going to file returns for the last 17 years. The client should know the costs associated with this versus the potential liability of never filing at all. What it boils down to is the broker is giving some very bad advice.

You are omitting 2 important pieces of information. First, you say there was an employee. Was the employee the spouse? If not, then it's not an EZ that should have been filed. If it was the spouse and an EZ is correct, then were the assets over $100,000? If the employee was not a spouse, then you should not file without going under the DFVC program.

To be specific, the 20% would apply if the distribution was rollover eligible. You didn't specify the source in your post.

I am sure you will get different answers on this. For me, in cases where I wasn't able to switch it to a BOY valuation date the year prior to the termination, I try and coordinate the distribution closely with the valuation. Say the distributions are scheduled for September 30, for a calendar year plan. I let the distributions occur, get the value immediately and run the valuation with the liabilities and assets pre-distribution. If there is a contribution required, I have the client make the contribution and make a second distribution immediately. Being a small plan actuary, often times it's the owner that receives less for the first distribution and then gets all of the final year's contribution. If there is no contribution required, it works well, in that the plan year ends 9/30 and the val date occured 9/30. When there is a contribution, then the final distribution may occur 10/10 or so. I go ahead and report the valuation date as 10/10 on the Schedule B even though it was 9/30 to avoid any discrepancies and because there is no better way that I can think of.

I would say there is a very good chance it would be approved. It's just a pain to go through the application.

Please clarify what you mean in the second sentence.

The exception is good for as many years as you want to use it.

Easy tiger.

An important distinction to be sure. As for consent, the question is what is the account balance at the time of distribution, not the distribution amount. So, you are correct in that spousal consent is required.

Two plans with participant directed investments maintained by two separate members of a controlled group have one contract account at Manulife Financial. The monies in the plan are kept separate by "division" within the contract. Is this a master trust or not? For clarification, each plan is sponsored by only one of the members of the controlled group.

He changed his mind. By doing so, there is a disconnect between his 2 posts. In other words don't read post 1 and conclude his current position. Ergo, disregard post 1. In conclusion, I would like to address that post 1 should not be factored in to future comments about the level of contributions.

He changed his mind on what comp to consider.

I would recommend reading Rev. Proc. 2003-44 for available self-correction options.

The language seems pretty standard and I would agree with your interpretation to not aggregate the compensation for allocation purposes.

I would.