terminating c corp

[Guest S FISCHER]

A c-corp with a 401(k) is terminating to create an s-corp. Can the 401(k) be amended or must it be termed and a new plan created?

[MJ Hartman]

not being an accountant I'm not sure how a taxable entity is re-established from one type to another, but the plan and trust are separate from any company. A document may state the type of entity estatblishing the plan (corporate, sub-s, not for profit, etc.), so certain provisions may need to be amended at the time the accountant modifies the company. I have never seen a plan terminated because of a re-classification by the sponsor. You'll need to be amending for GUST anyways, so you could incorporate any changes to the plan for change in tax entity at that time.