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5500ez vs "effective date of plan termination"


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Posted

Hello,

I am terminating a one-participant DC plan.  The plan document requires declaring an effective date of termination in writing with the company holding the trust, then disbursing assets from the trust within a year.

If I declare effective date of termination in February, then the assets are disbursed in, say, April, do I owe two "final" 5500ezs (one for partial year jan-feb to the effective date of termination, one final for partial year jan-April declaring zero assets) or just one final 5500ez for short year Jan through April showing zero assets at the end?  i.e. does "effective date of termination" per the plan doc have any effect on the 5500ez filings?

Thank you!

Posted
25 minutes ago, Khatva said:

i.e. does "effective date of termination" per the plan doc have any effect on the 5500ez filings?

It does not. 

There's not even a plan termination question on the form like there is on the 5500 I/H

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

  • 2 weeks later...
Posted

Thank you! 

One last question - the one-participant originally opened the plan for their own self employment (schedule C) income, but has not actually had schedule C income for many years (i.e. 5500ez lines 7a-7c all zeros, not an active participant anymore).  401(c)(1) defines a self employed individual as "an individual who has been a self-employed individual within the meaning of the preceding sentence for any prior taxable year."  Should the plan characteristics codes include 3B, even though there is no actual schedule C income for the current year, but has been in the past?  Or does 3B only apply if there's schedule C income in the current year?

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