Assignment: Tax Technical Analysis
Tax Issue: Can XCite Biotechnology, Inc. deduct the contributions to the 401(k) profit sharing plan for 2019?
Tax Questions:
How do the limitations on 401(k) contributions impact the deductibility?
1. What are the limitations on employee deferrals?
2. What are the limitations on employer match?
3. What are the limitations on the profit-sharing contributions?
4. What are the annual limitations for defined contribution plans and how do they impact the deductibility of the contributions?
5. Does the compensation limit for qualified plans impact the deductibility?
6. What is the max amount of compensation allowed in a taxable year to defer their salary?
What is the timing of contributions and when do they need to be made?
1. When are the employee deferrals or contributions deductible?
2. What about the 401(k) offer catch up contributions for some of the older employees? When and how are they deductible?
3. What is timing and requirements for deductibility of the 401(k) matching contributions?
4. What is "on account of such taxable year" for a contribution deemed made on the last day of the preceding year?
What are the other requirements for defined-contribution plans to be deductible?
1. Does XCite meet the requirements of a deductible defined-contribution plan under the IRC?
2. Are there any additional limitations on owner-employees (highly compensated executives)?
3. If an excess contribution is made, is it subject to any consequences, corrections or penalties?
4. Are excess contributions deductible?
5. If XCite has an operating loss can they contribute to the "profit sharing" plan?
6. What are the so-called nondiscrimination rules of qualified plans and Is the plan discriminatory under 401(k) and 401(m)?
7. What impact does failing the discrimination rules have on the deductibility?
8. When are the additional corrective contributions deductible?
Format your assignment according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the assignment, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.
Attachment:- Tax-Research-Memorandum-Background-Facts.rar