7. Assume the company decided to make a profit-sharing contribution that was integrated with Social 10 percent with a maximum excess percentage, how much would be contributed to the plan Security, with an integration level equal to the Social Security wage base. If the base percentage behalf of Jesse (disregard the salary deferral)? 9. Jesse has $702,000 accumulated in the 401(k) plan. The balance consists of deferrals, employer matching contributions, earnings, and profit-sharing contributions. Jesse also has an NOL carryover on his personal return from another business investment. Discuss whether Jesse can execute an in- plan Roth rollover and the tax implications. Answer: . . . . . ITEM SET 6: QUALIFIED PLAN RULES Bubbles twenty years ago and it has grown to be one of the more sizable web development firms in Bubbles LLC is a web design company that operates out of Boulder, Colorado, Jesse and Skyler started Colorado. Bubbles offers a 401(k) /profit sharing plan with a Roth account option. The plan has the following characteristics: Eligibility: age 21 and one-year of service Match: dollar for dollar match Vesting: 20% per year (years 1 through 5) Highly compensated definition: uses top 20% election Profit-sharing contribution: Bubbles generally makes a sizeable contribution, but the percentage varies. The plan has been amended to permit in-plan Roth rollovers. The plan permits rollovers from other qualified plans and IRAs. EE# Employee Ownership Age Tenure Salary Deferral 1 Jesse 60% 48 20 Years $200,000 $10,000 2 Skyler 30% 49 20 Years $150,000 $15,000 3 Walter 6% 33 15 Years $75,000 $5,250 4 Marie 4% 42 10 Years $85,000 $5,100 5 Hank 0% 58 8 Years $0 $60,000 6 Years 0% 29 $75,000 6 $4,500 Lydia 0% 53 4 Years $50,000 $0 Jane 7 19 0% 2 Years $0 $60,000 8 Hector 25 8 Months 0% $24,000 $0 9 Gale 6 Months 19 $0 0% $18,000 Gus Note: Lydia is Skyler's daughter. She graduated from the art institute five years ago. 10 7. Assume the company decided to make a profit-sharing contribution that was integrated with Social 10 percent with a maximum excess percentage, how much would be contributed to the plan Security, with an integration level equal to the Social Security wage base. If the base percentage behalf of Jesse (disregard the salary deferral)? 9. Jesse has $702,000 accumulated in the 401(k) plan. The balance consists of deferrals, employer matching contributions, earnings, and profit-sharing contributions. Jesse also has an NOL carryover on his personal return from another business investment. Discuss whether Jesse can execute an in- plan Roth rollover and the tax implications. Answer: . . . . . ITEM SET 6: QUALIFIED PLAN RULES Bubbles twenty years ago and it has grown to be one of the more sizable web development firms in Bubbles LLC is a web design company that operates out of Boulder, Colorado, Jesse and Skyler started Colorado. Bubbles offers a 401(k) /profit sharing plan with a Roth account option. The plan has the following characteristics: Eligibility: age 21 and one-year of service Match: dollar for dollar match Vesting: 20% per year (years 1 through 5) Highly compensated definition: uses top 20% election Profit-sharing contribution: Bubbles generally makes a sizeable contribution, but the percentage varies. The plan has been amended to permit in-plan Roth rollovers. The plan permits rollovers from other qualified plans and IRAs. EE# Employee Ownership Age Tenure Salary Deferral 1 Jesse 60% 48 20 Years $200,000 $10,000 2 Skyler 30% 49 20 Years $150,000 $15,000 3 Walter 6% 33 15 Years $75,000 $5,250 4 Marie 4% 42 10 Years $85,000 $5,100 5 Hank 0% 58 8 Years $0 $60,000 6 Years 0% 29 $75,000 6 $4,500 Lydia 0% 53 4 Years $50,000 $0 Jane 7 19 0% 2 Years $0 $60,000 8 Hector 25 8 Months 0% $24,000 $0 9 Gale 6 Months 19 $0 0% $18,000 Gus Note: Lydia is Skyler's daughter. She graduated from the art institute five years ago. 10
