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Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps
Edition 4ISBN: 978-0078110993Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps
Edition 4ISBN: 978-0078110993 Exercise 54
Cornell Company is considering the establishment of a pension plan. The proposed plan has the following features:
? Contributions for employees earning less than $100,000 will be based on 3% of salary, while contributions for those earning over $100,000 will be based on 4% of salary.
? To reduce employee turnover, company contributions will vest in 10 years.
? Employees with more than five years of service will be required to contribute 2% to the pension plan.
? Employee contributions will completely vest in one year.
Will the proposed pension plan be deemed a qualified pension plan? Why or why not?
? Contributions for employees earning less than $100,000 will be based on 3% of salary, while contributions for those earning over $100,000 will be based on 4% of salary.
? To reduce employee turnover, company contributions will vest in 10 years.
? Employees with more than five years of service will be required to contribute 2% to the pension plan.
? Employee contributions will completely vest in one year.
Will the proposed pension plan be deemed a qualified pension plan? Why or why not?
Explanation
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A Pension or Profit Sharing Plan obtain ...
Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps
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