austin3515 Posted September 23, 2002 Posted September 23, 2002 I have a money purchase plan which requires that all forfeitures available be used to offset the required employer contribution. This was not done, and the contribution has been funded fully for the previous year. The Plan does not contemplate this situation. My gut tells me that we need to dispose of forfeitures annually, but I can't find that in writing... Can anyone provide more info on this situation? Austin Powers, CPA, QPA, ERPA
mbozek Posted September 23, 2002 Posted September 23, 2002 Apply the forfeitures against contributions due for 2002. See Reg. 1.415-6(B)(5)-forfeitures allocated during the limitation year are annual additions for such year. mjb
IRC401 Posted September 27, 2002 Posted September 27, 2002 Was the last deposit of the money purchase contribution made during the plan year or after the end of the plan year? If it was made during the plan year, the employer made a nondeductible contribution (and owes an excise tax). If it was made after the end of the plan year, treat the excess as part of the contribution for the year of deposit.
austin3515 Posted September 27, 2002 Author Posted September 27, 2002 It was made after year end... Can you clarify the implications? Austin Powers, CPA, QPA, ERPA
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