Can money purchase plan contributions be reported on a cash basis on S

[John A]

Can money purchase plan contributions be reported on a cash basis on Sch. H and/or Sch. I? Can the money purchase plan be reported on a cash basis but contributions to the plan reported on an accrual basis?

If a money purchase plan can report contributions on a cash basis, is it okay to show zero for contributions on Sch. H or Sch. I if the contribution for the 1998 calendar year is deposited in 1998 and the contribution for 1999 is deposited in 2000?

Answer I got from the IRS was yes, and zero should be reported in above situation (of course, 1998 5500 would have had to show both contribution for 1997 and 1998 if both contributions were deposited in 1998).

Does anyone use the "modified cash" method? What is this method?

[Moe Howard]

Page 45 (Sch I) of the Form 5500 instruction booklet says you have a choice. You can use either of three methods 1)cash 2) accrual 3) modified cash ..... But you must use the same method each year.

What is modified cash method? It's a method in which you report all income and expenses on the cash method ..except for "contribution income" (which you report on the accrual method).