Lucky Stores, Inc. and Subsidiaries - Page 17

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          they would otherwise be deductible, they are deductible under               
          section 404, subject to articulated limitations as to the amount            
          deductible in any taxable year.  The limitations on the amount              
          deductible are contained in section 404(a)(1)(A), which also                
          refers to the deduction of contributions "In the taxable year               
          when paid".  While section 404(a)(1)(A) provides the limits on              
          the amount that may be deducted, it does not specify the method             
          by which the actual amount of the deduction may be determined.              
               The applicable limitations on contributions to the CBA Plans           
          in this case are contained in clauses (i) and (iii) of section              
          404(a)(1)(A), which, in combination, provide that the overall               
          limitation is the greater of the amount necessary to satisfy the            
          minimum funding standard of section 412(a) for plan years ending            
          within the employer's taxable year, and an amount equal to the              
          normal cost of the plan, augmented by any amount necessary to               
          amortize unfunded costs equally over 10 years.                              
               In addition, the flush language at the end of subparagraph             
          (A) of the foregoing section provides, among other things, that             
          the maximum amount deductible for the taxable year is to be an              
          amount equal to the full funding limitation for such year                   
          determined under section 412.                                               

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Last modified: May 25, 2011