a self employed person learned after the completion of 2001 that he is in a good position to implement a db plan for 2001.

I am not sure if one needs to have a signed plan document by 12/31/2001 or a summary of the primary plan provisions in place. I have heard of some situation where having the basic plan provisions in place was sufficient. I don't know if this is that situation.

Any comments or suggestions?

I tell my clients/prospective clients that at the very least they need a Corp. resolution adopting the plan and a Trust established (usually checking account in the name of the Plan w/ $1,000 in it) PRIOR to the end of the Fiscal year to which the deduction will apply. I also strongly recommend that they have a signed Plan Document in place prior to the end of year.

I think your self employed person is SOL, unless you want to find a "less then reputable" attorney to "find" some resolutions, but without an established trust, I think you are really asking for trouble.

He has until 4/15/02 to establish a SEP for 2001. Anything else is less than legit, and I think it's fair to say few people if any would touch it. Nobody I've worked with or for would.

Without a trust (and trust document) in place, there's no deduction available for the individual. This is true, even if there were board resolutions or even a plan document that has been properly drafted and adopted.

I agree that Gary's client is probably SOL, but I did want to clarify some statements about the existence of the trust. In the olden days, for a valid deduction to exist, the corpus had to be established before the end of the tax year.

However I believe that Rev. Rul. 81-114 made it clear that this was not necessary. If there if some evidence to the contrary, please enlighten me!

You need the trust to be in existance. You do not have to have money in it. That is my memory.

Alonzo: I agree that a trust instrument must be established, but not necessarily a trust corpus. At least according to the revenue ruling.