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I spoke with the TPA's Compliance Officer and he agreed that they should be providing the approval since they are approving the distribution. Thanks all.

Does anyone know or be able to provide a source. I have a sole spouse beneficiary of a qualified plan worth around $500,000. She wants to take $200,000 and move it to a Roth IRA (so do a spousal assumption of $200,000 into a IRA and then do a conversion once the funds are in a Traditional IRA in her name) and move the $300,000 and keep it as a beneficiary designation so she wants it moved to a Inherited Traditional IRA FBO her benefit. Can a sole spouse do a partial spousal assumption of the account?

A recordkeeper is asking for approval from a TPA in order to process a Internal Roth Rollover. TPA is saying that it's not warranted b/c they view it similarly as an asset-reallocation. I disagree and view believe the TPA needs to provide the approval because IRRs are governed by the Plan, has reporting requirements, and tax implications while an asset-reallocation does not. Any thoughts?

Sounds like what you're trying to do is a contract exchange (when funds are moved from one payroll slot provider to another payroll slot provider but the funds are still governed by the 403b plan document of your employer). If that is accurate, then the plan admin can determine the payroll slots and if that payroll slot vendor is no longer available, in this case Lincoln is no longer available, then you cannot do a contract exchange even though they were a previous payroll slot vendor. Hope this helps.

You're right. Now it's all coming back to me. Thanks for the follow up Luke

It's been a couple of years since I've been in the alt world. But if my memory serves me correctly, I believe the transaction investment in the collectable would be processed as a removal of excess contribution, since the investment was not eligible to be held in an IRA. An investment in a collectable is not treated as a PT. So the process is to calculate gains/losses, do a removal of excess contribution and report it current year. The client is now subject to any taxes and penalties associates with the excess contributions from the year in which the investment was purchase until 2020. Hope this helps.

Wanted to see how others are handling this. Client is invested in Mutual Funds (A Shares) in their Qualified Plan. They take a loan for $20,000 and start making repayments on the loan. The repayments are reinvested into the A shares but they are being assessed the Sales charges associated with A shares. Do others follow this process or do you not charge the Sales charges associated with A Shares?

If client has a OFAC hit, I thought you had to segregate the funds into a special holding account/blocked account?

R ally quickly, sole spouse is the beneficiary of a qualified plan. Participant passes, the sole spouse wants to keep the funds in the plan (spoke with Plan Admin and they are okay with solo spouse staying in the plan). We are updating the titling to John Doe deceased FBO Jane Doe (she doesn't want to do an assumption b/c she is under 59.5). Here's the question, if we are re-titling the account as a decedent account, it's still considered a rollover and we have to report it on a 1099-R with a tax code "G" or maybe "G4"? Because she rolled it over to an IRA, 1099-R would be issued.

And should complete a W-8BEN. You will need an original and based upon the country, they may have rights to invoke the treaty between their country and the USA for withholding. Also, if I remember right, the withholdings are done differently than the normal fed withholdings you would do.

Lucky- one thing that you mention is about changing the organizational structure from an LLC to a S-Corp. If the organization has retirement funds, it shouldn't be set up as a S-Corp. S-Corps don't allow retirement funds to be used for ownership. The investment should can be organized as a LLC.

No, actually if it is a new start up LLC and they invest capital for the 50% at the time that the LLC is established, it is not a PT. You can reference Swanson v. Commissioner (106 T.C. 76 (1996)). The U.S. Tax Court rules that "a corporation with shareholders does not fit within the definition of a disqualified person". This is the case that people use to have single member LLC (checkbook IRAs) held directly within their Retirement Accounts. The one thing that I would caution is that the LLC would become a plan asset because 50% of ownership is compromised of retirement funds.

Depends- since the PPT is deceased, if the Designated Roth has satisfied the 5 year rule than nothing but if it hasn't satisfied the 5 year rule, then the earning are subject to withholding rules.

I agree that Company "C" is not "controlled" by Father. You were looking at this from a strictly control perspective and not as it related to IRC 4975.

There's couple of ways to handle this: Luke is correct that they can do a rollover into a self directed inherited IRA. The beneficiaries would established the inherited IRA and then the custodian would make the efforts to retitle the ownership of the deceased to the Custodian FBO beneficiary's IRA. Depending what the Partnership Agreement says, the change of ownership could be as easy as sending a notice and updating the books to reflect the updated ownership of the Partnership. Or the PS Plan allows the beneficiaries to keep the partnership in the plan FBO the beneficiary, the plan can continue to own the partnership and recordkeep the asset. Or if the partnership cannot be assigned to the beneficiaries, then the PS plan will continue to be the owner and will have to wait until the Partnership pays out and is terminated. Which can take years (I've seen Partnership Agreements for 15 years). The one problem I have always run into in this scenario is the required distributions for the beneficiaries. I have argued to various Partnership and LLCs that they have to allow the assignment to beneficiaries b/c of the required distributions. Good luck.

There are so many different factors to consider regarding this situation but strictly staying on the question "Does owning a private home make them a 10% or more partner or joint venturers?" I just have a quick question, is the private home going to own in the name of the individuals or are they doing it through a LLC?

Not sure why the university would want their hardship form instead of just using the vendor's form. That would require university start tracking regulatory updates and making updates to the hardship form (extra work when they are already paying the vendor to do the work). Also, the vendor would require their own form completed and signed (since most forms have an indemnification clause indemnifying the vendor and reliance about the truthfulness of the signer). Seems like it would cause more work for the participant and the university.

How would you report a distribution from a church plan that was made associated with housing allowance and the minister was under the age of 59.5 on a 1099R. Would use code 1 or 2? Also, does anyone have the guidance on why that code would be used?

Are you trying to use PTE 80-26? Because if you are going to use that exemption, the loan has to 0% and no fees associated with the loan and you mentioned the friend was going to offer a 3% rate?

Hi Patricia- This would be distributions from their 403(b) plans that would be used specifically for housing allowance (sorry, should have spelled that out better). So we have to issue a 1099R because they are distributions from their retirement account. I guess I need to know if anyone is putting a taxable amount that matches the gross distribution amount in box 2a or leaving it blank?

Hi all- We have a church plan where the previous custodian, when distributions were made for housing allowance, would put $0 in box 2a and mark "Taxable Amount not Determined". Is this correct or should the taxable amount match the gross distribution and we should mark "Taxable Amount not Determined"? Wondering how other custodians file their 1099R

I'm probably overthinking this. Participant has vested balance of $90,000. Take out a loan for $35,000. We display their account balance now of $55,000 and a loan balance of $35,000. 6 months later, Participants wants to take a second loan. The second loan calculation would be based on the $90,000 ($55,000 account balance plus the $35,000 loan balance) and not just the $55,000 account balance, right?

Hi EBE- that's the way I understood it as well, that Individual tax filing and the 5498 filing have the same extension date of 7.15 and not August. Thanks

Has anyone heard that 5498-SA filing deadline has been pushed to August 31? The only thing I know if that Notice 2020-23 extending the filing and contribution date to 7.15. We have an HSA sponsoring saying their filing deadline was extended to August 31.

here's a blog about this. The assets still need to held in trust. Just like the cash portion of the Solo 401k can't be held a checking account in your name, an asset can't be held in a safe deposit box. This could violate IRC 4975 if you personal hold and transact with these assets from your retirement account. https://www.solo401k.com/blog/who-is-the-trustee-and-custodian-of-the-solo-401k/