Adoption of Plan and Deduction

[Dougsbpc]

Suppose you have a company with a 1/31/06 year end but a plan year beginning 10/1/2005 and ending 9/30/2006. The plan is a db and would have a beg of year valuation. My understanding is the deduction can be for the plan year beginning in the fiscal year.

Question: could a 2006 deduction be had if the plan were adopted after 1/31/2006?

[Guest mjb]

I thought the rule is that the deduction is aviailable for a plan year that ends or begins within the employer's tax yr or employer may use a weighted average for the number months that each plan year fell in a tax yr. Reg. 1.404(a)-14©. Plan must be adopted by end of employer tax year for which deduction is claimed by employer. Rev. Rul 81-114.