A husband receives income as a sole proprietor from one entity and his wife receives income as a sole proprietor from a different entity. Are they considered a controlled group based on attribution? Can they have one DB plan that includes both of them?

How do you calculate an RMD from an individual account plan that has a non-calendar year plan year and uses pooled investments? Assume the plan has an 09/30 plan year and gets a valuation only once year on 9/30. The regs suggest you take the account balance as of 09/30. Then you add contributions and forfeitures allocated from 10/1 to 12/31, and subtract distributions during that same period. For pooled investments, it is as simple as taking the 9/30 account balance, adding the 401(k) contributions (and forfeitures, if any) from 10/1 to 12/31, subtracting any distributions, and that is the value that gets divided by the life expectancy? What about the earnings from 10/1 to 12/31? My read of the regs is they are not picked up until the following year.

An ESOP sponsor is interested in closing down a long-term ESOP plan. If the company borrows the funds to repurchase the shares from participants, is the interest on that corporate loan deductible?

Background: Client hired employee in January of 2017. Employee maxed out deferrals with client (including catch up) in 401(k) plan for 2017. Employee also was paid the remaining portion of his 2016 compensation from former employer in 2017, and former employer withheld based on employee's 2016 deferral elections. Excess deferrals resulted. Correction will obviously not be done by April 15, 2018.

Issue: What is the correct course of action in this situation? Set forth below are my basic thoughts.

Code Section 402(g)(1)-(2) and Reg. Sec. 1.402(g)-1(e)(2) clarify that, unless timely distributed, excess deferrals are [1] included in participant's taxable income for the year contributed, and [2] taxed a second time when the deferrals are ultimately distributed from the plan. The excessive deferrals involved in the error were not timely corrected because the April 15 deadline had already passed. Accordingly, the error's excessive deferrals must be taxed for the 2017 year (i.e., the year contributed) and again when the excessive deferrals are distributed from the plan.

If a corrective distribution is not made within the correction period discussed above, then excess deferrals cannot be distributed until either the distribution is otherwise permissible under the terms of the plan, or the distribution is necessary to avoid plan disqualification under Code Section 401(a)(30). (Note: there is not a plan disqualification issue under Code Section 401(a)(30) because the error involves excessive deferrals between two unrelated plans and employers.*)

Reg. Sec. 1.402(g)-1(e)(8)(iii) allows for distributions of excess deferrals after the correction period to be distributed from 401(k) plan only when permitted under Code Section 401(k)(2)(B). As discussed above, plan disqualification is not an issue; accordingly, I believe the error's excessive deferrals can only be distributed if permitted under the terms of the plan (i.e. termination, age 59 1/2, or other Code Section 401(k)(2)(B) permissible times).

I could be wrong on this analysis and this is my first go at tackling this kind of problem so please let me know if I'm not on track, and thank you for your help!

*To elaborate on this point, under Code Section 401(a)(30), if the excess deferrals aren't withdrawn by April 15, each affected plan of the employer is subject to disqualification and would need to go through EPCRS. However, in the situation involving the described error, the excess deferral amounts involve two unrelated plans with two separate employers. The IRS has stated on its website that 'excess deferrals by a participant will not disqualify a plan if the excess is due to the aggregation of the participant's deferrals to a plan maintained by an unrelated employer.' Accordingly, the fact that error involves excessive deferrals among two unrelated plans/employers indemnifies the plans from experiencing a disqualifying event because of the error.

Can a small business employer with less than 20 employees, who offers group health insurance, sponsor a section 105 Health Reimbursement Plan to reimburse employees who opt out of the group offering and enroll in Medicare Part B, D and supplement?

Participant must be employed on last day of plan year, or work 500 hours in year of termination to receive a match. In 2017, one participant received a match, but term'd with 300 hours. Is a retroactive corrective amendment to eliminate the allocation conditions for 2017 an appropriate correction? The match is calculated and deposited each pay period, I'm thinking we should eliminate the allocation conditions altogether. Plan has no HCEs. Comments please? Thank you!