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contributions after termination


Scuba 401

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client has real estate in his plan and wants to make a contribution in order to pay the property taxes due. problem is plan has been recently terminated. can he contribute after the termination in order to pay the taxes?

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I think if you're going to do it right you need to un-terminate the plan and re-terminate it. But if the termination was effective in 2012 and the contribution was for 2011 that would be ok, IMO.

Isn't there any liquidity in the plan to pay the taxes?!

Ed Snyder

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can he contribute after the termination in order to pay the taxes?

Depends. Has benefit been distributed? If so, "un-terminate" seems pretty difficult.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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OP indicates assets still in plan.

Sort of. OP indicates real estate in the plan, but does not indicate whether other assets are in the plan.

Has any portion of the distribution commenced?

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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