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Belgarath

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  1. Like
    Belgarath reacted to CuseFan in S Corp plan   
    If you're asking about for the owner the answer is ZERO. Only W2 pay counts as compensation and qualifies the owner as also an employee. You also have an issue with requirement for S-corp owner/employees to take a reasonable salary.
  2. Like
    Belgarath reacted to Lou S. in S Corp plan   
    You don't say what type of plan or if there are other employees involved, but if the owner does not have any W-2 compensation than their 415 compensation from the S-Corp is $0.
  3. Like
    Belgarath got a reaction from CuseFan in Affiliated Service Group   
    Agreed. As I said, we always specify it is their decision, with the advice of tax/legal counsel. We do provide "discussion points" to educate them and for them to discuss with their attorney, with references to Code/regs. It's just that they hardly ever do. I can probably count on my fingers and toes the number of times in the last 10 years or so that a client actually has done so.  
  4. Like
    Belgarath reacted to CuseFan in Affiliated Service Group   
    I find these sorts of situations very interesting and very confusing. For a radio station, yes, you need equipment to function, but is it that equipment that is income-producing? One could argue that it is advertising revenue which is a function of artistic content rather than equipment. Dentists invest tremendous amounts of capital in their equipment, but no one argues they are not a service organization, right,  because it is their knowledge and skill in using such that is income-producing? Which is why code specifically says they're professional services.
    I'm not saying your radio station is or isn't a service organization, just that it's so darn gray/confusing that I say sometimes you need to steer them to the rules and then punt to the client, suggesting legal counsel aid in their decision, and ultimately disclaim responsibility for THEIR decision.
  5. Like
    Belgarath reacted to C. B. Zeller in Short sponsor year and full plan year   
    The 402(g) limit is always a calendar year limit. No need to prorate it.
    The 415(c) and 401(a)(17) limits may be prorated for a short plan year, although not necessarily for an initial short plan year. Check your plan document to see if it has special language about an initial short plan year.
  6. Like
    Belgarath reacted to austin3515 in Super fascninating question - Owners Child is an LTPT   
    LOL...  99.99% bad, .01% good 🤣
  7. Like
    Belgarath reacted to Peter Gulia in Super fascninating question - Owners Child is an LTPT   
    So austin3515 finds something to like in the long-term-part-time provision?!
  8. Like
    Belgarath got a reaction from Eve Sav in Can "Temporary Employees" be considered an excluded class?   
    I believe the proposed regs say that if you have elapsed time, as long as the waiting period isn't longer than12 months, then LTPT doesn't apply anyway?
  9. Like
    Belgarath reacted to Bill Presson in Basic questions on permitting "aggressive" investments   
    Yuck. Tell him to roll his own money to an IRA and make the investment and not taint the plan.
  10. Like
    Belgarath reacted to C. B. Zeller in ROTH Deferral... Too Late?   
    Yes, it is too late to make a deferral election (including a Roth deferral election) for 2023. A deferral election has to be in place before the compensation is paid to the participant.
    The contribution that was made to the plan needs to be allocated according to the plan's allocation formula for employer contributions.
  11. Like
  12. Like
    Belgarath reacted to Bill Presson in Changing Pro Rata Profit Sharing Allocation to New Comparability Mid-Year   
    Agreed. If the plan had last day requirements, I would argue the other way.
  13. Like
    Belgarath got a reaction from Lou S. in Changing Pro Rata Profit Sharing Allocation to New Comparability Mid-Year   
    Well, the position of the IRS is that the existing formula gives the participants a "protected allocable share"  (i.e. IF an allocation is made for 2024, it must be pro-rata) and that such an amendment couldn't be implemented until 2025.
    I've seen arguments that the IRS' position is inaccurate, but I wouldn't want to fight that battle
  14. Like
    Belgarath got a reaction from justanotheradmin in Changing Pro Rata Profit Sharing Allocation to New Comparability Mid-Year   
    Well, the position of the IRS is that the existing formula gives the participants a "protected allocable share"  (i.e. IF an allocation is made for 2024, it must be pro-rata) and that such an amendment couldn't be implemented until 2025.
    I've seen arguments that the IRS' position is inaccurate, but I wouldn't want to fight that battle
  15. Like
    Belgarath reacted to Peter Gulia in 403(b) Plan and disregarded entity   
    Does this rule help support an interpretation?
    Special rule regarding severance from employment. For purposes of this section, severance from employment occurs on any date on which an employee ceases to be an employee of an eligible employer, even though the employee may continue to be employed either by another entity that is treated as the same employer where either that other entity is not an entity that can be an eligible employer (such as transferring from a section 501(c)(3) organization to a for-profit subsidiary of the section 501(c)(3) organization) or in a capacity that is not employment with an eligible employer (for example, ceasing to be an employee performing services for a public school but continuing to work for the same State employer). Thus, this paragraph (h) does not apply if an employee transfers from one section 501(c)(3) organization to another section 501(c)(3) organization that is treated as the same employer or if an employee transfers from one public school to another public school of the same State employer.
    26 C.F.R. § 1.403(b)-6(h) https://www.ecfr.gov/current/title-26/part-1/section-1.403(b)-6#p-1.403(b)-6(h)
  16. Like
    Belgarath reacted to Ilene Ferenczy in When should a user of an IRS-preapproved document sign its SECURE 2019 amendment?   
    While it makes sense not to sign an amendment in the interim unless the plan is terminating, you need to be sure to keep track of actual administrative decisions in the meantime.  The client or TPA may want to mark the proposed amendment as PROPOSED or DRAFT or something like that with a plan year notated, and then complete it simply as a means of denoting for the file what elections were made.  It is possible that preapproved plan providers are ... um, providing ... something for this purpose.
    Just sayin' ....
  17. Like
    Belgarath got a reaction from CuseFan in When should a user of an IRS-preapproved document sign its SECURE 2019 amendment?   
    The amendment date should be after the date the practitioner is planning to retire.😁
    (If there is anyone reading this who doesn't have a sense of humor, please ignore the above comment)
    But seriously, to a certain extent the amendment date may also be driven by other factors - staffing, number of plans, other projects such as restatements, etc.
  18. Thanks
    Belgarath got a reaction from Peter Gulia in Is SECURE 2022 law?   
    Interesting. I'm completely unqualified to opine on the legal technicalities - but what (for me) passes as common sense, leads me to ask why in the world would an employer attempt to litigate this when the only practical effect is allowing certain employees to defer ONLY - no employer contributions, top heavy, etc., etc.?
    Seems like the expense, and hassle, is the losing end of a bad deal.
  19. Haha
    Belgarath got a reaction from Lauren0507 in When should a user of an IRS-preapproved document sign its SECURE 2019 amendment?   
    The amendment date should be after the date the practitioner is planning to retire.😁
    (If there is anyone reading this who doesn't have a sense of humor, please ignore the above comment)
    But seriously, to a certain extent the amendment date may also be driven by other factors - staffing, number of plans, other projects such as restatements, etc.
  20. Haha
    Belgarath got a reaction from FishOn in When should a user of an IRS-preapproved document sign its SECURE 2019 amendment?   
    The amendment date should be after the date the practitioner is planning to retire.😁
    (If there is anyone reading this who doesn't have a sense of humor, please ignore the above comment)
    But seriously, to a certain extent the amendment date may also be driven by other factors - staffing, number of plans, other projects such as restatements, etc.
  21. Like
    Belgarath reacted to CuseFan in Controlling plan provision: plan at time of death or time of correction?   
    I believe whatever provisions applied at the time the distribution should have been or had to have been made under the terms of the plan should be applied when corrective distribution is made. 
  22. Like
    Belgarath reacted to Paul I in When should a user of an IRS-preapproved document sign its SECURE 2019 amendment?   
    Adding to the chaos, DC Cycle 4 technically has started already but the IRS is not yet open for business to receive submissions.  The IRS expected to open the submission window from Feb. 1, 2024, through Jan. 31, 2025, but I have not seen an announcement. 
    If the window is open soon, we likely will be doing Cycle 4 amendments for everyone with the restatement period running from the latter part of 2026 into 2028. 
    The December 31, 2026 hits right around the beginning of that restatement period.
    The LRMs were updated this January and are available here https://www.irs.gov/pub/irs-tege/dc-lrm0124.pdf if anyone has time to spare to read through 149 pages.
    If the submission window does open soon, imagine how much guidance has yet to be issued that will not be in the LRMs included in the Cycle 4 documents.
     
     
     
  23. Thanks
    Belgarath got a reaction from Peter Gulia in When should a user of an IRS-preapproved document sign its SECURE 2019 amendment?   
    The amendment date should be after the date the practitioner is planning to retire.😁
    (If there is anyone reading this who doesn't have a sense of humor, please ignore the above comment)
    But seriously, to a certain extent the amendment date may also be driven by other factors - staffing, number of plans, other projects such as restatements, etc.
  24. Like
    Belgarath reacted to Bill Presson in safe harbor non-elective   
    The plan document will outline when a rehire re-enters the plan. That’s the cite. 
  25. Like
    Belgarath reacted to Peter Gulia in 457(b) distributions   
    Meeting § 457(b)-(e)’s application of § 401(a)(9) is not an exclusive explanation of a provision that refers to the April 1 after a severance. For example:
    In the 1980s, many § 457(b) plans were designed to allow a period—often, 60 days after the severance (or 60 days after the end of the year in which the severance occurred) for a participant’s election to defer payment to her specified date. Absent an election, a plan provided payment on the first of the month after the end of the election period. Some plans set provisions of this kind in terms of calendar dates.
    You’re right that Internal Revenue Code § 457 does not preclude provisions more limiting than those needed to state a § 457(b) eligible deferred compensation plan.
    For a governmental plan, church plan, or other plan for which ERISA does not supersede and preempt State law, a plan’s sponsor might consider relevant States’ laws.
    For a governmental § 457(b) plan, providing an involuntary distribution sooner than is needed to meet a condition for tax treatment as an eligible plan is unusual.
    For a nongovernmental § 457(b) plan, providing a distribution after severance from employment, with little or no choice to defer longer, is somewhat less unusual.
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