5500-EZ line 10g - "net income received by the plan for the year&

[Dave Baker]

Line 10g on the 2000 Form 5500-EZ asks for "Amounts received by the plan other than from contributions."

The instructions to line 10g, say "Include rollovers, direct transfers under section 401(a)(31), transfers under setion 414(l), and net income received by the plan for the year. Do not include unrealized and realized gains or losses."

My question is whether this line is really asking the sponsor to go into the plan's investment records and peel out interest, dividents, rents, and any other sort of investment "income" except realized and unrealized gains or losses. There's no line item asking for the amount of realized or unrealized gains or losses.

It doesn't seem to make sense to lump such income into an item along with rollovers and transfers. For data collection purposes, wouldn't the government want to have some way to separate the increase in a trust fund due to investment results from those that are due to transfers into the plan (whether by employer contributions, rollovers, 414(l) mergers, etc.)?

Is the "income" to be reported merely referring to some obscure kind of income to the plan's trust other than investment income?

[Lynn Campbell]

The 1999 instructions for this line specify: "Do not include unrealized gains or losses". I was not aware of this change. In any case it seems to require splitting out the interest/dividends etc. from the unrealized and realized gain... I do not know why this information would be useful to the IRS...

[Guest crosseyedtester]

Since current directions say to exclude unrealized gains or losses but do not mention realized, what do we do now?

1. Exclude unrealized, but include realized?

2. Exclude both?

Thanks

[Bird]

It doesn't seem to make sense to lump such income into an item along with rollovers and transfers. For data collection purposes, wouldn't the government want to have some way to separate the increase in a trust fund due to investment results from those that are due to transfers into the plan (whether by employer contributions, rollovers, 414(l) mergers, etc.)?

I find it best not to look for logic in such matters; there is none. You'll just give yourself a headache, or worse, realize that a significant percentage of your time is spent keeping track of stuff that has no significance to anyone, anywhere, ever, which then leads to wondering just how important your job is...never mind.

We reconcile assets for EZ plans the same as we do for any other - we determine earnings from interest and dividends, realized gains (from beginning of year), unrealized gains (from BOY). Then we give 'em what it appears they want on the EZ- earnings plus realized gains, not unrealized gains (plus rollovers, etc. if applicable). The assets and net income don't reconcile, but that definitely doesn't matter.

[No Name]

I include the Unrealized Gains. Screw it.

[Earl]

But then your 5500 would "balance" and that would be a red flag! Oh no!