truphao

The key is to have every entity you own to be named as a participating Employer in the 4019k) Plan via the joinder agreement.

I would try to reach out to participant first. If no avail, I would do the calculations based on the normal form under the plan and be done.

I would recommend stepping back and understand why this is a takeover situation in a first place. If it is a client who is uncapable of following directions, walk away. If it is a client who needs a lot of handholding (aka babysitting), charge the premium price. If it is a prior vendor issue, have an open candid conversation with the client to get him to understand that the takeover issues will be billed separately as OOS work. Whatever time you think you are going to pend multiply by at least 150%.

I am guessing it is shortcoming on Datair part. I have personally discovered one issue in the past that had to do with allocation of deduction for partners and Datair acknowledged that I was correct and added it to their "to-do" list. There a number of instances where the easiest solution with Datair is to overwrite or "fudge" to get the results you believe is correct. I think you can simply overwrite just the testing comp in your case.

I think this is OK. The key is not to have any pre-tax IRA to avoid the pro-rata. The devil is in details as usual.

I wonder if the "accrual method of accounting" makes a difference. I believe many (if not majority) of S Corporations in micro market use cash method.

I do not think you are missing anything here with a caveat I ain't a 401(k) expert. Somehow random words like Paychex and ADP are floating through my head.

I think the informal IRS position was that there would be 2 different classes of implicit ERFs - one for HCEs and another for NHCEs thus it automatically fails the BRF test.

I am looking at a takeover CB Plan. The Plan Doc provides for 2.0% ICR for HCEs and 5.0% ICR for NHCEs. I vaguely recall that idea was floating around 5 or 6 years ago but was informally criticized by IRS on account of creating different BRFs and thus failing that test. Does anyone have any recent information on such design and any source of additional background info to research in more depth?

I believe there is some internal threshold for the stable value funds. If the threshold is exceed then the MVA is triggered. The threshold is evaluated over 12-months rolling period to prevent from staggering. I am aware of at least one player for whom the threshold is 25%. All of that probably (or should be) outlined in details of the Service Agreement with the recordkeeper. Overall, it is a very big issue right now and should be planned for ahead of time especially when considering plan termination. There are definitely some interesting consulting opportunities out there right now.

DOL refers to a "participant" and not to "employee/employed". That equalizes VTs with actives.

accountant originally claimed only 150K. The return has already been refiled. Thank you all for great feedback.

Thank you rocknrolls2. the saying "you do not know what you do not know" keeps spinning in my head today.

so, does anyone have some thoughts what "custom" forms might be necessary if money goes to estate?

apologize for not being clear - there is a pecking order in the Plan Doc: If a Participant dies without having a Beneficiary designation then in force, or if all of the Beneficiaries designated by a Participant predecease him, his Beneficiary shall be his surviving spouse, or if none, his surviving children, equally, or if none, such other heirs, or the executor or administrator of his estate, as the Plan Administrator shall select.

As Effen correctly noted, the doc says "the benefit will be paid "per stirpes", then to the estate". Are there any specific forms need to be done to accommodate the payment to the estate?

I have never dealt with this before. Also, not sure if I should have posted this in "Distribution" or in "Estate Planning". Here is the situation. A NHCE participant has passed, never returned a Beneficiary Designation form. The CB is < $1,000. What paperwork the client should have in place in additional to a "normal" distribution package? What should be the process to disburse the funds? I am thinking: 1) Some kind of documentation regarding the estate trust 2) Documentation regarding who the trust administrator is 3) Money should be payable directly to estate with the estate administrator being signatory after the paperwork is on file 4) Anything else I need to thinking about? You do not know what you do not know

Lou, thank you for confirming my logic - much appreciated.

Sole-prop situation with the CB Plan. The minimum for 2022 is 160K, the client has made only 150K contribution in 2022 for 2022 Plan Year. CPA went ahead and has already filed the tax return for 2022 without consulting with anyone. Per my conversation with the advisor, the "missing" 10K has been deposited today. My understanding that reliance on revenue ruling 76-28 - https://www.taxnotes.com/research/federal/irs-guidance/revenue-rulings/rev.-rul.-76-28/dcb4 still secures the deduction of that 10,000 for 2022 tax year as long as the tax return is refiled. 1) Anything I might be missing here? 2) Reliance on 76-28 requires a designation in writing by Sponsor to Plan Administrator of that contribution as being made for 2022. Does anyone has a sample of such language they would be willing to share? 3) Tax return will have to be amended - I do not believe it needs to be amended by 4/15 and can be really amended at any point. Thoughts?

also, you can possibly think of a method change to possibly "shift" the benefits from the FTNC to FT. That way you get a benefit of 15 years amortization which will drive your numbers down. Not sure if it would fall under the "automatic approval" of method change though - please see the rev proc. 2017-56?

LLC taxes as an S Corp. Taxes have been filed by March 15th. I do not know yet if the extension has been filed or not. Is there a creative approach to install the Plan retro to 1/1/2022?

Based on the information presented I think she would enter the CB plan but would not accrue any benefits since hours <1,000 required for accrual. Which might require the 7.5% gateway for her as a side comment. I generally agree on her entering the plans immediately upon rehire. However I do have a coupe of complicated rehire situations so I am also trying to do a refresher on BIS/rehires rules - can anyone point a good summary?

the following example is directly form PBGC website - Lastly, to qualify for the small professional service plan exemption, the professional individual(s) must be engaged in the same professional service as the principal business of the plan sponsor. For example, consider a situation where: Company X is owned by an attorney, John Smith. Company X sponsors a defined benefit plan that has never had more than 25 participants. Company X’s primary business is the sale of insurance products. In this scenario, despite the fact that the company’s owner is an attorney (a profession that’s on the statutory list of professional individuals), Company X’s defined benefit plan would not qualify for the professional service plan coverage exception.

CB Zeller, would it matter? This is husband, wife and daughter only?

nope, this is owners-only plan and those are not PBGC covered.