IRC codes Flashcards
IRC 401(a)(4)
Plans, exclude nonresident, aliens, and collectively bargained employees if contributions or benefits do not discriminate in favor of HCES
401(k)
Cash or deferred arrangement
401M
Matching and ACP testing
404
Deduction for contributions of an employer to an employee’s
trust,
annuity and
compensation
under a deferred payment plan
410 a
Max eligibility requirements, age 21 service 12 months
410 B special rule –
max eligibility: service two years (immediate vesting)
411 D
Minimum vesting standards:
A plan which satisfies this section is treated as satisfying 401(a)4; full vesting at Retirement age, vesting schedules, etc.
412
Minimum funding standards: DB, money, purchase, multi employer plan
413
Collectively, bargained, multi employer plans
414 B
Controlled group treated as single employer - corporations
414 C
Controlled group treated as a single employer – sole proprietorships and partnerships
414 M
Employees of an affiliated service group
414 N3
Employee leasing requirements
414 o
Empower secretary to prevent avoidance of employee, benefits through separate organizations, employee leasing, or other arrangements
415
Annual additions limit on contributions under qualified plans
IRC267
Used to determine individuals who are prohibited from engaging in certain transactions involving plan assets.
IRC 318
Attribution is used in determining affiliated service groups and in identifying HCE’s and key employees
IRC 1563
Attribution is used in determining controlled groups of business businesses under 414 B and 414 C
IRC 1563 determines the attribution of ownership to family members. Aside from an owner being legally separated, or going through a divorce decree what are the other stipulations that must be met to ensure there is no attribution? (Four criteria-all of which must be met.)
1) the spouse does not direct ownership in the business
2) the spouse is not a director or employee and does not participate in the management
3) no more than 50% of the business gross income is derived from passive investments
4) the business owner cannot be required to offer a right of first refusal to his or her spouse or their children before selling
How did secure act 2.0 impact 1563 attribution of a business ownership interest to a spouse? When did this take affect?
January 1, 2024
Secure act 2.0 contains a provision that eliminates the ownership attribution due to community property, thus allowing for exceptions to spousal attribution
Ryan has a doctor and owns 100% of a professional corporation engaged in medicine. Lisa, Ryan’s spouse is an attorney and owns 100% of a professional corporation engaged in the practice of law. Neither one is involved as a director or employee of the others corporation, nor in the management of that corporation. Is ownership attributed to either spouse?
It is not because the four criteria for exception have been met:
1) No direct owner ownership.
2) Not a direct employee- no management
3) 50% or less and passive investment income
4) No right of first refusal
Secure act 2.0 contain a provision that eliminates ownership attribution due to community property both for the spouse but also for minor children. What does that mean?
Separately how does that impact IRC 318?
Ownership attribution is not extended to minor children anymore
IRC 318 continues to separately apply to determinations of key and HCE employee status for minor children
IRC 408(k)
SEPS
IRC 408p
SIMPLE IRAs
