When is a Profit Sharing Plan no longer a Profit Sharing Plan?

[52626]

Corporation sponsored a Profit Sharing Plan for several years.  The corporation still exists, but there are no employees.  The assets in the plan belong to the principal.  He no longer takes a salary from the corporation.  Some of the assets can not be easily distributed.  As long as he continues to file the 5500 and keeps the plan document current, any issue with the plan just going on.  He takes RMDs from the Plan and that is the only transaction.

Since the principal is the only participant entitled to a benefit, is there any issue with the Trust continuing. It is not an orphan/wasting trust since the corporation is still in existence.

 

Thoughts??

 

[ETA Consulting LLC]

I don't think this would be an issue.  The only argument would could make is that contributions must be recurring and substantial, but that has been interpreted to suggest that the plan is operated for at least 5 years.  This type of thing happens all the type; as long as you keep the plan documents current and continue to report when required (I would imagine it's 5500 EZ reporting now), then you should be fine.

Good Luck!