Consequences of failure to timely adopt.

[jkharvey]

I'm trying to run through all of the possible consequences for this problem. Plan was effective 1/1/1994 but the adoption agreement wasn't signed until 8/1/1995. I know the following would be true, but what else?

1. ER Contributions are not deductible until participants are vested. This occurred in 1994-1995 so the statute of limitations has expired for the corporate return.

2. Contributions are taxable to participants when made. Once again, statute of limitations has expired on participant returns.

3. Trust is taxable. Is the portion of the trust related to the 1994 contribution taxable until distributed?

4. Distributions from the 1994 contributions, are not "qualified" for rollover. If rolled into any IRA or other qualified plan, could have a problem.

What am I not considering? Thanks.