Qualified plans still offer benefits, but rules governing them are increasingly complex
Article Abstract:
Recent tax legislation, including the Tax Reform Act of 1986 (TRA '86), the Technical and Miscellaneous Revenue Act of 1988 (TAMRA), and the Single-Employer Pension Plan Amendments Act of 1986 (SEPPAA) have made changes to the regulations governing qualified plans and have created new penalties to ensure that tax-deferred assets are not used as tax shelters. TRA '86 has introduced new regulations covering: minimum coverage and vesting rules; integration with Social Security; and qualified plan distributions. TAMRA has introduced regulations concerning: nondiscrimination rules, minimum coverage and participation; and regulating the taxation of pension plan distributions. SEPPAA provides voluntary termination of a plan by an employer: standard termination for adequately financed plans and a distress termination for underfinanced plans.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1989
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Failure to follow plans shows lack of profit motive
Article Abstract:
Taxpayers typically can only claim deductions for business enterprises entered into for profit. The Harston case, involving horse training and breeding, illustrates the fact that taxpayers may be precluded from deducting losses if they prepare for a business activity but do not carry on the business activity in accordance to the preparation, thus demonstrating the lack of a profit motive. However, the lack of a profit motive does not automatically submit taxpayers to penalties for negligence. For horse training and breeding, the activities assumed to be entered into for profit if it is profitable in any two out of seven consecutive years.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1991
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