Lou81 Posted January 24, 2020 Share Posted January 24, 2020 We have a new client that has a life policy in the plan. it does not appear that the PS58 cost have ever been report. I read on a prior thread that the PS58 cost were optional, but I also read they are required to be reported. Is it required? If so, would i just start now. I wouldn't want to go back and have him redo taxes... yikes! Thanks! Link to comment Share on other sites More sharing options...
Larry Starr Posted January 24, 2020 Share Posted January 24, 2020 1 hour ago, Lou81 said: We have a new client that has a life policy in the plan. it does not appear that the PS58 cost have ever been report. I read on a prior thread that the PS58 cost were optional, but I also read they are required to be reported. Is it required? If so, would i just start now. I wouldn't want to go back and have him redo taxes... yikes! Thanks! They are required assuming his beneficiary will receive the proceeds (and not as key man insurance that is payable to the plan). He has years where he failed to report taxable income; if he gets caught he gets caught. There is also the minor issue of recovery of PS 58 costs at some eventual date but I will ignore that. Certainly start now, but decision has to be made about past years; but probably only for open tax years (3 years back). Bill Presson 1 Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC President Qualified Plan Consultants, Inc. 46 Daggett Drive West Springfield, MA 01089 413-736-2066 larrystarr@qpc-inc.com Link to comment Share on other sites More sharing options...
Bird Posted January 27, 2020 Share Posted January 27, 2020 But if it is a self-employed person, then I believe proper treatment is to not deduct the PS-58 costs (and of course not have the plan report them). It gets them to the same place. Ed Snyder Link to comment Share on other sites More sharing options...
Belgarath Posted January 27, 2020 Share Posted January 27, 2020 Agreed, and trying to remember ancient history, I thought the S/E did not get to recover the TTC. It has thankfully been a long time since I had to deal with life insurance in a plan. Link to comment Share on other sites More sharing options...
Lou81 Posted January 27, 2020 Author Share Posted January 27, 2020 thank you! Not self -employed. I will discuss with the accountant~ Link to comment Share on other sites More sharing options...
Larry Starr Posted January 27, 2020 Share Posted January 27, 2020 1 hour ago, Lou81 said: thank you! Not self -employed. I will discuss with the accountant~ Then refer back to my original response. The SE issue is interesting, but we don't have to delve into it in this instance. Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC President Qualified Plan Consultants, Inc. 46 Daggett Drive West Springfield, MA 01089 413-736-2066 larrystarr@qpc-inc.com Link to comment Share on other sites More sharing options...
Luke Bailey Posted January 28, 2020 Share Posted January 28, 2020 In a case involving a large plan that did not want to have to issue the back 1099-R's for PS 58 costs to correct, we negotiated a closing agreement with IRS for payment by employer. Luke Bailey Senior Counsel Clark Hill PLC 214-651-4572 (O) | LBailey@clarkhill.com 2600 Dallas Parkway Suite 600 Frisco, TX 75034 Link to comment Share on other sites More sharing options...
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