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  #11  
Old 10-25-2008, 03:23 PM
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volva yet volva yet is offline
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Originally Posted by Rick_G View Post
Under the 404 regulation (which applies to multiemployer plans), the calculation of the deductible limit uses interest to the earlier of the end of the plan year or the end of the tax year. The exception is the Full Funding Limitation, which always has interest to the end of the plan year.

The 404 regulation clarifies that the deductible limit can be paid at any time during the year. The deductible limit is defined for the tax year, but not as an amount assumed payable at a specific date.

For single employer plans, we have no regulations - not even proposed regulations. Just based on reading IRC 404(o), the calculation is defined as of the valuation date. This is due to the definition of the Funding target and Target normal cost as of the valuation date.
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Originally Posted by davefarber View Post
And I would not expect any interest issues to come up on this year's exam with regard to single employer plans, since there are no regulations. If you look at the deduction questions from last year's exam for single employer plans, you will see that they gave you valuation results for a year -- the specific date was not given in order to completely avoid the interest issue.
Thanks guys. I assume that, as consultants, the two of you would deduct the MDC back to the valuation date for single-employer plans? It only makes sense to me.
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  #12  
Old 10-25-2008, 05:52 PM
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Thanks guys. I assume that, as consultants, the two of you would deduct the MDC back to the valuation date for single-employer plans? It only makes sense to me.
It may make sense, but I would not assume that is how it will play out when regulations are issued. By the way, I just got back from the ASPPA annual conference, and a representative from Treasury, in talking about upcoming regulations, said that they have not even had discussions about proposed 404 regulations for single employer plans, so don't expect any guidance on this for quite some time.
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  #13  
Old 10-26-2008, 11:29 PM
narwhal narwhal is offline
 
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Default 2007 #17

Is this why, in your solution to #17 (Rick G) you didn't interest adjust the contribution made on 7/1/2007?

Interestingly, if I do interest adjust it and I do the calculation without using the alternate excise tax definition, I fall into the correct answer range.

So much for two wrongs don't make a right.
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  #14  
Old 10-27-2008, 09:40 AM
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Is this why, in your solution to #17 (Rick G) you didn't interest adjust the contribution made on 7/1/2007?

Interestingly, if I do interest adjust it and I do the calculation without using the alternate excise tax definition, I fall into the correct answer range.

So much for two wrongs don't make a right.
It is possible they constructed the answer ranges so that would happen. On the other hand, I would prefer my students work the problem based on IRC 404(o). That should always give a result in the right answer range.
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