Rules for excess employee plan deferrals clarified
Article Abstract:
The IRS provides advice in its Notice 88-33 IRB 1988-13, 23 about treating certain excess deferrals of distributions in qualified employee plans. Excise tax can be avoided if these the excess amounts are returned along with allocable income shortly after the plan or tax year ends. Any amounts in excess of IRS limits on elective deferrals become includable in gross income, should they be distributed within two and one-half months after the plan year ends. Model amendments for plan sponsors to help them comply with post-Tax Reform Act of 1986 requirements are also discussed.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1988
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Can a simple accounting entry result in a taxable dividend?
Article Abstract:
A case is presented to illustrate the fact that simple accounting entry errors can result in a taxable dividend. In the case of a company that distributed undistributed taxable income to shareholders and required the shareholders to loan back the amounts, an error by the bookkeeper resulted in an additional dividend to one shareholder when the error was adjusted. The shareholder claimed that the amount she received to make up for the error was a repayment of the original dividend loaned to the corporation, but the IRS ruled that it was dividend income.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1990
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