Defined Benefit Plans!
I have a client who wants to open a defined benefit plan so he can roll his IRA into it and continue to defer taxes without having to take forced distributions. He has an LLC but my question is “Does the LLC have to be in existance for a required amount of time before he is allowed to open a DBP?”
Also, are there any business structures that are not allowed to open a DBP, a sole proprietor for example?
Permalink Submitted by Denise Appleby on Sat, 2008-11-15 03:38
No to both questions.
Permalink Submitted by mk foss on Sat, 2008-11-15 23:04
The defined benefit plan must be opened before the end of the year for which it is first effective. A 2008 plan must be opened with a small contribuiton by 12/31/2008 even though it takes until some time in 2009 to determine the allowable contribution.