Van Roekel Farms, Inc. - Page 5




                                        - 5 -                                         
          petitioner paid him on a Schedule C, Profit or Loss From                    
          Business:                                                                   
       Wages,                   Business               Type of                        
       salaries1                  income                business                      
        Year           (Line 7, Form 1040)          (Schedule C)          (Schedule C)
       1994                $12,776                    $15,000           Farm management
       1995                 12,967                     18,000           Farming       
       1996                 13,356                     15,000           Farm management
       1The wages are attributable solely to Darlene, a secretary at the Orange City  
       Municipal Hospital in Iowa.                                                    
               Respondent disqualified the plan for years beginning after             
          July 31, 1993, because allocations to Mr. Van Roekel, an                    
          independent contractor, in fiscal 1994, 1995, and 1996 exceeded             
          the limits of section 415(c).                                               
          Discussion                                                                  
               Section 401(a) lists the qualification requirements of a               
          pension, profit-sharing, and stock bonus plan.  It provides in              
          part:                                                                       
                         SEC. 401(a). Requirements for                                
                    Qualification.--A trust created or organized                      
                    in the United States and forming part of a                        
                    stock bonus, pension, or profit–sharing plan                      
                    of an employer for the exclusive benefit of                       
                    his employees or their beneficiaries shall                        
                    constitute a qualified trust under this                           
                    section--                                                         
          *     *     *     *     *     *     *                                       
                         (16) A trust shall not constitute a                          
                         qualified trust under this section if                        
                         the plan of which such trust is a part                       
                         provides for benefits or contributions                       
                         which exceed the limitations of section                      
                         415.                                                         







Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011