All Forum Posts by: Bernard Reisz

@Michael Plaks Honored by the mention! 

@Jason Coleman There are 2 steps to decision making with regard to Cost Seg. Step 1 is to get an estimate of the amount of tax deductions that may be available through Cost Seg. All quality Cost Seg providers provide complimentary preliminary analyses. Step 2 is to get your tax professional's input on the real value of those deductions to you. The "exchange rate" for conversions of tax deductions to tax savings vary from investor to investor. There are numerous factors at play and your real estate tax professional is best positioned to opine on that. Michael Plaks has created several great resources here on BP to educate about these, as does ReSure on its education platform (including some plagiarization of Michael's content!)

@Malik Javed makes several valuable points that highlight that Cost Seg is not a commodity and what goes on "under the hood" varies from firm to firm. Malik - Glad that these points are being highlighted here on BP and def concur will them! 

@Alicia Prokos (and anyone else in the same position) A 401k plan is a type of Qualified Retirement Plan, in which there are - at a minimum - 2 essential roles: Trustee and Administrator.

Plan administrator – The person who is identified in the plan document as having responsibility for running the plan.

Plan trustee – Someone who has the exclusive authority and discretion to manage and control the plan assets.

In the overwhelming majority of plans, it is the business owner and/or the business entity adopting the plan that fill these roles.

Companies that provide 401k administrative services are more aptly called "third-party administrators." This means that the true plan administrator in the eyes of the IRS and DOL remains the business owner/sponsoring business. (These lots more to be said about this, particularly within the ERISA plan context, but this is the gist of it.) The TPA (shorthand for third-party administrator) is simply providing "outsourced" plan services to the plan's true administrator. For ERISA 401k plans (non-Solo plans), the TPA industry is more substantive - many thousands of times over - than for Solo 401k plans 

The backbone of a 401k plan is a compliant plan document. To assist businesses in adopting 401k plans, TPAs and other plan service providers "license" use of IRS pre-approved plan documents to their clients. 

As mentioned in a prior comment, a 401k plan does not require a financial institution custodian or trustee, unlike an IRA.

The terms "plan administrator" and "plan provider" oftentimes mean different things to different people, particularly in the Solo 401k plan space. Notwithstanding, "plan provider" connotes a service that is primarily focused on 401k document provision and compliance support and "plan administrator" connotes a more involved level of support in management of the plan. However, as these terms are not used "scientifically" in the Solo 401k industry, it's advisable not to focus on those terms; rather, develop a sense of what's required to maintain a Solo 401k plan and identify exactly what is offered by a service provider.

The upshot of all this is that once you've adopted a Solo 401k plan, it doesn't suddenly vanish or become non-compliant because a "plan provider" or "plan administrator" resigns. However, to ensure your plan remains compliant, including plan document maintenance and plan operation, you should engage alternate service providers.

@Michael Plaks Honored by the mention! @Tina Artigliere To put you at ease, the role of the "custodian" or "administrator" for a Solo 401k plan is nominal. For IRAs and HSAs, a financial institution trustee is an integral part of what the Tax Code defines as an IRA or HSA. For 401k plans there is no requirement that there be a financial institution trustee or administrator. And, if you look in the fine print of your Solo 401k paperwork, you'll likely discover that their role is, technically, less than nominal. The upshot of all this is that a 401k plan can still be 100% compliant even if your "administrator" stops "administering" it.

@Michael Plaks Honored by the mention! 

@Matt Ruttenberg Glad to connect further!

@Michael Plaks Honored by the mention. Thank you. 

@John Cava While the ideal time to get unbiased professional insight is before the transaction, getting such advice can still be very impactful at this point.

Cost Seg illustrations - even when (1) they're accurate and (2) formatted in a way that fosters an accurate understanding of the potential benefits - only illustrate deductions. However, the real value of those deductions to a particular taxpayer can only be determined in conjunction with their tax professional.

@Michael Plaks So much to deconstruct here! (Pun intended :))  

 @Michael Plaks Once again, illustrating that BP has got to start offering more reaction options beyond "vote!"  

@Dorothy Wulf Do and your husband have separate plans or a single plan in which you both participate? (Spouses can, in most cases, share a 401k plan, thereby reducing fees and paperwork burden.) 

@Shravan Hemchand Looking forward to it!