Deductible contribution

[retbenser]

New plan effective 1/1/2009

Contributions paid on 3/1/2010 = $300,000

2009 Maximum Contribution = $400,000

Amount deducted in 2009 tax return = $300,000

Question: Is it possible to allocate $250,000 of the contribution to 2009 plan year (as receivable) and the remaining $50,000 to the 2010 plan year? (Even though $300,000 was deducted in 2009)? (This mean the asset at 12/31/2009 is $250,000)

Question: If yes, what do you show as contribution in the 2009 SB ($250,000 or $300,000)?

Thanks for all responses.

[Andy the Actuary]

New plan effective 1/1/2009

Contributions paid on 3/1/2010 = $300,000

2009 Maximum Contribution = $400,000

Amount deducted in 2009 tax return = $300,000

Question: Is it possible to allocate $250,000 of the contribution to 2009 plan year (as receivable) and the remaining $50,000 to the 2010 plan year? (Even though $300,000 was deducted in 2009)? (This mean the asset at 12/31/2009 is $250,000)

Question: If yes, what do you show as contribution in the 2009 SB ($250,000 or $300,000)?

Thanks for all responses.

Let's see, it sounds as if you want to deduct the entire contribution in 2009 but claim $250K on the 2009 SB and $50K on the 2010 SB. My recollection is the IRS has opined that the deduction cannot be tied to an earlier year than the year of the Schedule SB on which the contribution was claimed. There were some posts on this topic a year or two ago and maybe even a gray book question. If you believe this, then the answer is "no" in respect of the $50K. Since the deduction was already taken, this would mean you would report $300K on the 2009 SB. Hopefully, some reader with a clearer memory can clarify or refute.

[david rigby]

I read the original Q a bit differently.

If you want to change the deduction for 2009, that sounds like amending the tax filing. If permitted (see tax advisor), then the 300K can be divided as desired: 250K deducted on the amended tax filing and 50K as part of the 2010 plan year contribution. The SB and Schedule H/I would show 250K as the 2009 contribution. I think you have to do all these steps, or none.

[Andy the Actuary]

So, since two people read your request in different ways, would you please elaborate on your question.

[SoCalActuary]

If the deduction of $300k stays on the 2009 tax return, then there is no point in further discussion.

If the return is amended, with the plan sponsor designating the contribution in two years, then follow the prior advice from David.

[retbenser]

So, since two people read your request in different ways, would you please elaborate on your question.

Thanks. Your interpretation of my question is the right one.

.