Can an executor of a dead farmer's estate make a SEP contribution on the final return in the year of the farmer's death?

[Guest Robert Lees]

Can an executor of a dead farmers estate make a SEP contribution on the final return in the year of the farmers death.

[Gary Lesser]

Yes, a SEP contribution can be effectuated by the executor who steps into the shoes of the Plan Administrator. A regular (annual traditional) IRA contribution, however, can not be made on behalf of a dead person.

[jane123]

I have the same issue as the original post for a sole proprietor

has anything changed?

Thanks in advance

Jane

[Gary Lesser]

Answer is still YES. If contributions have be made for year and the plan is top-heavy, a minimum contribution may have to be made if there are any employees that must be covered for year.

Although the sole-proprietorship has terminated (presumably, the only way it can under the tax code--by death of the sole-proprietor, although a formal change of entity classifacation might also be a termination), the affairs of the business still have to be wound up. This is generally handled by the executor/executrix.

If a contribution is made for any employee for the year, a SEP eligible owner would be required to receive an allocation of the contribution for the year (even though they may not need it).

Whether or not a SEP contribution should be made may depend on facts involved and other tax and non-tax issues.