Jakyasar

Thank you both

With my limited knowledge (or lack of it), was he not supposed to roll into a regular IRA first and then convert?

Asking for a CPA friend A terminated participant rolls over his pre-tax 401k account and employer account (SH+PS) directly into a ROTH IRA without any conversion during July 2025 and is now concerned about the taxes. As this is out of my knowledge base, what is wrong with this scenario, what should have been done and what should be done now? Thank you

Agree with your analysis based on my research. Thank you

Hi Bill It is 2 separate plans in a combo situation. One plan has top paid election to determine HCEs and the other has lookback election definition.

Might be inheriting 2 existing plans for 2025, one has top-paid and one has lookback definition for HCE determination. Too late to change anything for 2025. Did some research on BL and also Notice 97-45, not sure I located the answer but looks like I can only use "lookback" method. Will be amending to match during 2026. Any comments or cites are appreciated. Thank you

Here are the 2 documents listed under EGTRRA - good luck E TRADE CLEARING LLC INC RANCHO CORDOVA, CA 312C1862701-001 STANDARDIZED PROFIT SHARING M287965 3/31/2008 E TRADE CLEARING LLC INC RANCHO CORDOVA, CA 312C1862701-002 STANDARDIZED MONEY PURCHASE M288129 3/31/2008

Here is a link to the IRS website for the opinion letters. I checked as far as EGTRRA and E*TRADE has PSP and MPP listed. May not help locating the actual documents you are looking for but at least the opinion letters are there. FWIW List of pre-approved plans | Internal Revenue Service

Interesting as a participant directly depositing into the plan.

Agree with Bri and Cusefan. Lending money to the corporation for pension purposes is a very common practice. As the sponsor is a corporation, all contributions must come directly from the sponsor and no one else.

I meant for the new participants who are not eligible for PS allocation.

Even if they do not defer and get a SHM?

Owner only and hit the account 2 months after the distribution occured.

Hi DB plan terminated and did all the distributions during 2026 and also paid the RMD based on account balance method. Now, a small residue ($550) hit the account which is also subject to RMD. It is roughly $20. I cannot remember if there was a de minimum amount that can be ignored? Actual distribution was 2.5M with RMD of 100k. TIA

Perfect and thank you both