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Recent ERISA questions

I have/had a non-qualified annuity. This annuity is

Hello. I have/had a non-qualified annuity. This annuity is collateral for a loan. In 2013, we filed Chapter 7 bankruptcy. Since then, the bank has been taking money out of the annuity to make the payments on the loan. This has caused us a substantial tax event every year since then. The IRS has a tax lien against us because of this. Our CPA says we should just do an Offer-in-Compromise and offer the IRS 20 cents on the dollar to settle. We are not willing to do this because we bankrupted and the annuity should belong to the bank now. He told us to hire a tax attorney, which is ridiculous because the answer seems like it should be simple...we bankrupted on a loan that the bank had collateral for...we should be done with both the loan and the annuity...in my opinion. How can we stop the tax events? Shouldn't the annuity be out of our name? Please help! Thank you, ***** *****JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?Customer: Not that I know of. The first year this happened (2013) this event more than doubled our income!!! By the way, we had to file bankruptcy because our financial advisor stole all of our money.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,706 satisfied customers
Is it legal to 'roll' or transfer retirement funds from

Is it legal to 'roll' or transfer retirement funds from employer sponsored plans, IRA, TSA, 401-k, P&P(pension and profit sharing) to purchase stock in a private, closely held company, without incurring a tax, until the stock in the private company is sold ?Is it legal to loan(secured) the same private company funds from the above listed retirement accounts ?

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,706 satisfied customers
I am self-employed and have set-up a 401-K. I currently have

I am self-employed and have set-up a 401-K. I currently have small loan against it. I am allowed to borrow up to 50% of the 401-K asset value. I have $15,000 that I was going to use to pay down a second mortgage.Question: Can I make a $15,000 contribution to my 401-K for 2016 and then borrow $18,500 in the from the 401-K in the form of a loan? It seems like a no-brainer to get the tax advantage of the $15,000 contribution and then use the proceeds of the 401-K loan to pay down my second mortgage.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,706 satisfied customers
I am in NC, legally separated two years. I would like to,

I am in NC, legally separated for about two years. I would like to, and my husband has agreed to, disburse IRA/401k funds prior to a Divorce. It has been determined that we don't need to get a Divorce to settle these accounts. However, as far as the property is concerned, we will leave that intact at this time. Since he is willing to split funds amicably, I don't need a QDRO. How can I provide my Legal Separation documents to secure these funds. I would like to get a Rollover to my IRA account, thus avoiding any tax penalties. I would appreciate your assistance.JA: Because family law varies from place to place, can you tell me what state this is in?Customer: First sentence states I am in North Carolina. ThanksJA: Have you talked to a lawyer yet?Customer: No, not at this point.JA: Anything else you think the lawyer should know?Customer: Yes, my husband has a "Defined Pension Plan" but for now, since I am the beneficiary and this can't be changed unless there is a Divorce, I am not too concerned about it.JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Lawyer about your situation and then connect you two.

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Robin D.

Vocational, Technical or Trade School

21,198 satisfied customers
Would a cash-equivalent investment (not a money market

Would a cash-equivalent investment (not a money market mutual fund nor Stable Value alternative) that is constructed exclusively of FDIC-Insured bank demand accounts (not securities) and offered to participant-directed Defined Contribution retirement plans be considered a security by the SEC (and thus subject to ICA 1940 rules)?These types of interest-bearing FDIC-Insured accounts have been utilized successfully in the institutional cash management world for many years (see sweep accounts), but never packaged in a manner to make them available to qualified plan participants. We are exploring that opportunity.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,706 satisfied customers
I separated from my employer in 2014 (the same year

Hello. I separated from my employer in 2014 (the same year I turned 55). I cashed out my 401-k and fortunately did not have to pay the 10% penalty due to rule of 55. It was a defined contribution plan with over 1,000 participants. The paperwork I received made note of the age 55 exception. I'm 99% sure this was a qualified retirement plan and the documents did refer to the ERISA regulations. Can you confirm that I am okay with the 10% percent exception? I cashed out the 401-k in 2014 and hate to ask my former employer for information. Thanks for your help.

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Christopher B, Esq.

Attorney

Juris Doctor

5,290 satisfied customers
It is Professional. me and my wife partner in LLC. We file

It is for Tax Professional.me and my wife partner in LLC. We file joint return.I have set up 401K plan under my LLC . since it is husband and wife LLC, We do not generate W2, so did not do salary deferrals towards 401K. I have contributed to this 401K a lump sump allowed salary deferrals limit of 24000, before December 31st. is this allowed?What is the max amount I can contribute to 401K for myself? .can I contribute for my wife too she also works in another company , which has 401K?Should I enter this amount in Schedule C or 1065

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,706 satisfied customers
I am preparing a 1065 partnership return - no employees. The

Hi - I am preparing a 1065 partnership return - no employees. The (2) partners setup a SIMPLE IRA this past year. One partner has contributed and I am recognizing that contribution of $12,500 on their K-1. The company match of 3% is based on the partners earnings reflected on the K-1. Where is that amount reflected on the return/K-1? Also, if it is a company deduction it would then reduce the earnings which would then change the 3% so it becomes a cycle... I am thinking it is also just reflected on the K-1 only but the company does make the contribution itself.... ??

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,706 satisfied customers
I have a client who did Rollover start up 1) The business

I have a client who did Rollover for business start up1) The business owner establishes a C Corporation.2) A qualified retirement plan (for the company covering all employees) is established by the C Corporation. This can either be a profit sharing plan or a 401(k) plan. The retirement plan provides, as one of its options, the ability to buy stock in the company.3) The business owner rolls over the funds in a qualified retirement account such as a 401(k), traditional IRA, or 403(b) into the company's retirement program.4) The business owner elects to purchase company stock with some or all of his or her retirement account with the company.5) The business owner uses the resulting money to finance a new business, fund an existing business, or purchase an existing business.My client did all of these things aforementioned. My question is when filing the tax return. I would assume the C corp created with the 401K plan (which holds 100% of stock in the Operating C corp) would simply report the value of the 401K as of 12/31/15 as the asset (would this be line 9 or 14)? The same amount as the Stock on line 22.

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,014 satisfied customers
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