Corrective distributions

[Guest ahayford]

I want to make sure I'm reading Rev. Proc. 2001-17, 6.02(1), 6.02 (4)(a) correctly. Does a loss need to be adjusted on a corrective distribution? Only a gain needs to be corrected?

Also what if an employer over contributes, employee contributes $18,000 and the employer contributes $30,000. How do we make the corrective distribution, and how does an employer record that?

[Guest ahayford]

I want to make sure I'm reading Rev. Proc. 2001-17, 6.02(1), 6.02 (4)(a) correctly. Does a loss need to be adjusted on a corrective distribution? Only a gain needs to be corrected?

Also what if an employer over contributes, employee contributes $18,000 and the employer contributes $30,000. How do we make the corrective distribution, and how does an employer record that?

[QDROphile]

You should really be using Rev. Proc. 2003-44, and it is about to become obsolete..

[Everett Moreland]

My memory is the 457 regs tell you in detail what to do

[Tom Poje]

the self correction program you cite has been updated 2 times, the most recent is Rev Proc 2003-44.

while I dont think anything has changed in regards to your particular question, it is always best to use the most recent guidelines.

now, if I understand your question correctly, ee has deferred 18,000 and received 30,000 in ee contribution. assuming ee is catch up eligible part of the deferrals can be treated as catch up. since we are not through the end of 2005 not sure what year is being talked about, and if it is non calendar year I get all twisted in regards to catch up that anything I say would probably be incorrect. so I keep my mouth shut and depend on others.

If, AND ONLY IF, the plan allows it, deferrals may be returned to the employee. 1.415 - 6©(iv) clearly permits it, but then goes on to say including 'gains attributable to those deferrals'.

the regs for most other corrections say 'include earnings' which would be both gains and losses. however, in regards to 415 it only says gains. in fact, later on in the same paragraph it soeaks on investment gains and investment losses in regards to suspense accounts, so this would seem to be pretty specific.

[Guest ahayford]

What is 1.415-6(iv)?