Basically

Client is completing an application to invest in a new asset. He is a single person plan investing in a limited partnership. One of the questions is below. How would he answer the question without being too vague (i.e. investor is a qualified retirement plan) "If the investor is exempt from US Federal Income Tax, please indicate the basis for the exemption:" Thanks!

hmmm... this was supplied to me with regards to investing in Real Estate. http://www.irs.gov/irm/part4/ch50s11.html#d0e500995 I have not read it through yet...

That is the scheme... the plan is going to be the sole holder of the mortgage. It is a true investment. I told the financial advisor to inform the trustee that his sister's husband's nephew can not live there. They understand. The plan will obtain the mortgage and the mortgage will be paid from rental income. I have never heard of a plan taking out a mortgage on any type of RE. Thanks... any other thoughts would be appreciated!

I have always swayed people away from investing in RE. Here is the plan... Invest $100K of plan $ in rental properties AND use the plan as collateral for a loan to purchase the balance of the property. Or that is what I think their plan is. I have searched for more specific posts but none address the second part which is to use the plan as collateral for the mortgage. Thanks!

lol... nothing funny... I was EXTREMELY tired and couldnt think! I think I am a little punchy now. Both single person LLCs, they just want to only have one plan for simplicity sake.

Husband and wife each have an LLC... can they have one plan between them? Why wouldnt they be able to?

That was my understanding... as long as the 2 companies are totall separate and neither husband or wife has anything to do with the other... no income for the whole year. These 2 are fine with not being a part of each other... want to do it right.. crossing all the "T"s and dotting all the "i"s As for otherwise excludables... I am not sure what the hire dates of the agency EEs are. I am guessing that they would have the 1000 hrs and 1 year. Thanks for your comments.

Agency EEs need to be covered even if they are terminated early in the year? Wife will have no involvement until Agency is gone. Thanks!

Husband is a self employed consultant... no EEs Wife owns travel agency. 4-6 EEs Wife is closing business before the end of the year... but may drag on into 2007. Can husband open a Solo 401K and defer himself. Wife will work for Hub but will not defer until 2007. Any problems here? Thanks!

What news letters, subscriptions are people using to keep on top of pension issues? Thanks!

Ahhh.. thanks Austin... just a simple confirmation made me feel THAT mutch better. I have been looking at the EZ instructions... I will look at the 5500 instructions. Thanks!

I think I am thinking too much today.... In another area I asked the question... controlled group? Now I think I have the answer but have this question... Here are the specifics: Company A ... son and wife 50/50 owners Company B ... son, wife, mom, and dad 25/25/25/25 owners From my research (hope I am getting it correct) this is not a controlled group. And since it is not a controlled group can the son and wife both participate in both plans? 2 separate 415 limits? To delve deeper... Company A would establish a plan and since it would be a husband and wife business there would not be a 5500 requirement. But, if Company B was to also establish a plan would we still be able to file an EZ?... 4 partners/owners? No 5500 requirement? Is there a catch I am missing? Thanks!

ping..... I missed this... If son is concluded to own 100% of company A by attribution (ownes wifes shares) and at the same time ownes 100% of company B by attribution (ownes mom's, dad's and wife's) then indeed it is a controlled group... Anyone? ahh... after further research... (and some help) the son doesnt own his parents share because he doesnt own more than 50% of company B... so Son 100% of company A and 50% of company B... no controlled group Am I talking to myself?

Here is the scoop... Company A : son & wife 50/50 Company B : mom, dad, son wife 25/25/25/25 Control group? I didnt think so... thanks! I now have more info...... Company A... Buys land and develops it. Sells lots to builders Company B... Purchases lots from A exclusively Builds houses and sells them Profit is split among the 4 owners (mom, dad, son, wife) Now, a CG? ASG? Bottom line, Can there be one plan? Can there be 2 plans with 2 415 limits? If one plan and company A sponsors it, would mom and dad be EEs of A or owners? If owners, then can we file 5500EZ?

A participant has a Simple IRA, a traditional IRA, and a Rollover IRA. He wants to roll them into a qualified plan and have them be considered "Roth" contributions. He from that point forward wants to make Roth contributions to the plan. Can these IRAs be rolled into the plan and be considered Roth? Will he have to pay any penalties? (to convert to Roth) Thanks

All of my plans are small. The frequency of the distributions from these plans are definately not yearly. Many of these plan sponsors (almost all of them actually) need their hands held when it comes to dotting the "i"s and crossing the "t"s. Making withholding payments is especially a problem. To make the process easier for me I was considering instructing them to establish an EFTPS account for their plan and simply transmitting the $ that way. Am I a dinasaur.. has everyone already done this? Is there any reason why this should not be the norm? Thoughts? Thanks!

That is good news... so, if he has a consulting gig as a surgeon then he can establish the plan under that and be his own sponsor. In your example he is not being protected by Title 1 but rather through IRS protection as you have mentioned. I certainly value everyone's opinion... any thoughts for this Massachusetts Doctor?

He could add accounts... but it is where the $$ is that is the issue. He uses an advisor and is very happy. He wants to keep the $$ with him but at the new plan that is not possible. He wants to roll his $$ out of his existing practice's plan and into some retirement vehicle where he is protected and at the same time can invest with his financial guru. In a one person plan there is no Title 1 protection is there... If he kept the old plan alive he would need a sponsor to sponsor the plan. His business is going away... no sponsor. Once the plan sponsor is gone he has 12 months to liquidate. Am I mistaken? even if he kept the plan alive, he would be the only participant. suggestions?

Ok, It was my understanding that a one man show plan is not protected from creditors or a lawsuit. He is a vascular surgeon... wants to protect his $$. He can very easily establish a plan... does it have to be a MP? Could it be a PS? AND, the benefit would be 2 415 limits since he will have his own plan as a sole proprietor and from the group he is joining (he will not own much if any part of the new entity) Am I getting two thumbs up on that plan of attack? Thanks!

Massachusetts

Client is closing a plan because he is joining a larger medical practice. He doesnt like the investment choices he will have in the new plan and has asked where can he put his $ and still protect it. If he opens a plan and is the only participant he is not protected under ERISA... what are his options. IRAs are subject to litigation... what to do Thanks!

If a participant has his bene a trust, do you still use the same RMD factor?

Thank you. I appreciate your help. This ia a new client... and actually I am not even responsible for the admin.. just restated the docs to implement some changes they wanted. I wanted to give them the option of a SH before we go to print with the changes.

I understand that it would need to be checked a SH plan for it to be one... that simply based on the formula it wouldnt be deemed a SH. I have never had 2 401k plans for the same client... didnt know if since one was a SH then it would eliminate testing for the other. First... Plan 1... would that pass as a SH formula? what do you mean "same restrictions as the deferrals"? Sorry for my ineptness with acronyms.. B,R,Fs?

When you have a SH match, does it have to go along with the typical "100% of the first 3%... etc" ? I have a new client that wants (has) the following: 2 401K plans..... 100% vested at all times Plan 1 has a 4% max deferral limit in which they match 200% Plan 2 there is no limit to what they can defer of course as long as they do not go over the 402g limit. Would plan 1 be considered a SH plan? Thanks