"I have an owner of an LLC who is the only employee. She owns her company 100% and her company is a participating ER of the plan that her husband's company (another owner only LLC) that sponsor's the plan. It is a control group for now anyway, thanks to Secure 2.0. She has been talking to someone other than us (her TPA) and her broker and thinks she can open a 2nd 401k plan. Since her company is an adopter of the plan she is currently in, wouldn't she be prohibited from creating a 2nd 401k plan? Since there will no longer be a control group next year because of the family attribution changes, she could spin off her own plan, right? I have done a small handful of mergers, but this is the opposite and am not sure how this would be handled."

"A few questions about FSA during M&A: Scenario: The FSA plan continues under the seller's plan -- after the two parties agree that the seller will continue its medical FSA for the transferred employees, I am reading the buyer must have an existing medical FSA plan OR be prepared to adopt a new one. QUESTION: How soon does the buyer have to adopt a new FSA plan? Say for example, the parties agree the buyer will continue the seller's plan until the end of the plan year. Would the buyer have to adopt the new one after the end of the seller's plan year or is it expected that the buyer will have to adopt the new FSA plan ASAP after the close of sale? QUESTION: If the buyer assumes the seller's medical FSA how does that usually work with the FSA vendor and the contract? Does the buyer have their own contract with the vendor? What is the usual situation with this?"

"Start-up 401(k) plan for small employer (no more than 5 regular employees, not including interns) intends to have eligibility criteria for all contribution sources attainment of age 18 and completion of 6 months of service, elapsed time, with quarterly entry dates. The sponsor wants to exclude interns, but there is a concern that the exclusion may result in a coverage failure, given the number of interns and their potential duration of service. To avoid a coverage failure, can the plan provide for an exclusion of interns subject to a fail-safe that allows an intern to enter the plan effective the first day of the quarter coincident with or next following the intern's attainment of age 21 and completion of 12 months and 1,000 hours of service?"

"Now that pre-approved ESOP documents are available, I have a question about the timing of adopting one. An employer has an ESOP, which did receive a determination letter several years ago. The CPA wants to know if a pre-approved ESOP document has an IRS approval date in 2020, is it a 'late' adoption if adopted currently? In other words, does the normal 2-year window apply? I'm thinking that as long as timely interim amendments were adopted, they should be ok -- relying on the prior determination letter until they adopt the new pre-approved plan at whatever date."

"We have a client that is an LLC filing as a partnership but the K-1s are completed differently than I have seen before. There is nothing reported in Box 14 even though the net income for the company for the year was over $1 million. Both partners received guaranteed income for the year of $120,000. One partner is a limited partner and the other a general partner. We asked the CPA why there was nothing in Box 14 and he indicated that per the IRS rules, if a reasonable guaranteed payment for services is paid to each member, the earnings of the LLC reported in Box 1 of the K-1 would not be subject to SE tax. They believe that the $120,000 is a reasonable amount and each member did pay SE taxes on that amount. Since guaranteed payments are not normally considered in the self-employment compensation calculation and there is nothing in Box 4, it seems that their plan compensation would be zero. They did defer and wanted to put in a profit sharing contribution for themselves but I think the deferrals will have to be returned. Does this sound correct? Has anyone had this situation?"