Basically

If a participant in a plan is not an owner, do they have to take an RMD? Wasn't that the way it was in the beginning? Only owners had to take an RMD, non-owners didn't have to take an RMD from a qualified plan? Thanks

No. Come to find out there is rollover money. She can take a dist from that pool, correct? she is 59-1/2

Has the window for a COVID distribution totally closed?

Thankyou. For contributions each entity pays their own share. That is, if Betty earns compensation from her S-Corp then her S-Corp pays the contribution while at the same time Company X pays the contribution for her Company X W2 wages. It makes sense... just crossing my "T"s.

I am really sorry for beating this horse. I am a very visual person. I've attached a quick "schematic" of this situation. The goal is to have a plan for Company X for the employees. If A and B need to be included, so be it. Gotta do it right. If you look at my schematic attached you will see that Betty receives W2 income from X and wants to participate. Dave is just the owner of S-Corp B, no W2 from X. Dave wants to have a plan through his own S-Corp. (sheesh, he may already have one) I am no CPA... S-Corps owning other businesses... above my pay grade how you set that up. I get that each S-Corp will be paid their share of the profits from X via a K-1. Bottom line, they want a plan for X... do we need to include A and B (ASG)? and if so we just count everyone involved as is they were all part of one big company.. correct? Sorry to recap. Just want to put the facts out there.

The partnership has rank and file employees. I have been given the following facts: Partnership has 6 or so rank and file employees One of the S-corp owners also receives W2 wages from the partnership Other partner only receives a K1 from the partnership How does that change the circumstances?

Here is a follow-up question that the client sent to me regarding contribution.... would the contribution for the owners be based on the net income of the partnership? Or on the W2 wages paid out of the S corporations that hold the ownership in the partnership? Contributions are based on compensation... so W2 wages.. right? Damn... and what I understand is that one partner earns W2 wages from the partnership and of course her S-Corp. The other only from his S-Corp. When you have this situation, do you combine W2 income she gets from both places (partnership and S-Corp) to determine her total comp? And contribution wise pro rate it between the 2 businesses? And... if this plan comes to fruition the best option would be to setup the plan as a new comp with everyone in their own group. Best bang for the buck for the owners. THANKS! Always learning.

Allll Righty then! If that is all it takes then an ASG. Question... in an ASG does there not have to be any reciprocal services performed? Can it simply be that the 2 S-corps own company X and that alone will make it an A-org FSO?

Really? I was just reading up on ASG. Is there some kind of grid to complete that helps determine yes or no? Maybe a good clear example? I will ask more questions of the owners but it is my understanding that both S-corps are just owners of X. They do not perform any services for X or draw business from X. All 3 businesses are accounting firms. All stand alone businesses. Thanks for questioning me. I want to give this potential new client the right answer.

No there is no affiliated service group. Both A & B are single member companies. They are both CPAs.. IDK why they set it up like this. I didn't see it as an issue after talking it through with another pension professional. Just getting other opinions. Thanks

A CPA came to me with this scenario... She and her partner own an accounting firm (Company X) The accounting firm is owned by her S Corp (Company A) and her partner's S Corp (Company B) Accounting firm ownership % is Company A 25%, Company B 75% Company A owner earns W2 wages from Company X, Company B owner takes his Company X compensation in the form of a K1 to Company B They want to setup a 401(k) plan for Company X. Q1 - I don't see any problem there... Company X pays it's employees and they can defer if they want. Correct? Q2 - In this scenario do we have to include all 3 companies? I don't see a control group Q3 - Can each company have their own plan? I guess what is throwing me is that the S Corps own the accounting firm, not individuals. Does that make a difference? Am I missing anything?

👍 Got cha'

Ohh.. ok. The plan has been liquidated, the 1 employee has been paid out so I will file now. Just to recap: If I file before 12/31/2021 I use the 2020 form 5500-EZ If I file in 2022 I would use the 2021 form 5500-EZ The year end on the form regardless of the form's year would be the day the plan was 100% liquidated, 11/24/2021 (I wouldn't put the year end 12/31/2021) Thanks to all for chiming in. My goal is to understand the proper/correct way to complete what I am sure to many are things that are ingrained. I'm a firm believer that it can't hurt to ask.

Thanks! I am of the mind to file it now before it slips through the cracks. Just for my own knowledge, I would use a 2020 form because the plan would be a short year ending before December 31, 2021?

So what I am gathering is that to do it right I would prepare a form 5500-EZ now using a 2020 form, make the PYE say 11/24 and file it. Sound right?

A client closed down her single member plan and it's final liquidation occurred on 11/23. The balance is $0. My next step is to prepare a final form 5500-EZ. Do I use the 2020 EZ? and change the year end to be 11/23/2021? Just want to do it correctly, cross the T's and dot the I's Thanks

I have this older client who has a single member business (a civil engineer consultant). He want's to retire. Unfortunately, he got hooked up with a guy who sold him 2 lots in an RV park. Both lots are basically worthless now, he can't sell them. I've never heard of a pension plan donating assets. He's ready and willing to walk away if that is what it takes to liquidate his plan once and for all. - Can the plan donate the RV lots? - Does he have to take the RV lots as a distribution in "kind", and then donate them? Any thoughts on what the best course to take might be?

I am reading that to return the IRA distribution that ALL of it must be returned. - If 200,000 is distributed and 40,000 withholding is paid, to return the distribution within 60 days all 200,000 must be returned . Am I mistaken? Can the 160,000 simply be returned reducing the the distribution to 40,000 which ACK points out would result in a possible IRS refund?

I will take a look, thank you!

Can anyone point me to a link that will outline the history of the IRS' 6 year restatement history? is there such a definitive list? When it started? Required and optional interim amendments, a chronological history? Thanks

Ahh... yes. Thank you C.B., that is what I was looking for. RMDs are part of the basic operation of a plan... something that must be done. I sometimes second guess my knowledge. Appreciate the help.

Pooled... which is why I am asking and which is why I have in the past just used the 9/30 year end balance. If they were segregated brokerage accounts using 12/31 would have been easy.

For a September 30 FYE plan, when calculating the RMD can/do you use the 9/30 balance or do you need to determine the 12/31 balance and calculate the distribution based on that year end balance? Thanks

Coincidentally, today a client that setup a straight 401(k) for the employees only now wishes to participate in the plan. According to Lou's post above, I can amend the plan now to be a 3% NEC safe harbor as long as I do it by November 30. Correct?

Ahh... Zeller posted just before I did.. so let me amend my post. - To go from PS to 401(k) you just need to give everyone 90 days. As always, Thanks for the help!