Jhagan
May 28 1999, 03:32 PM
What is the amoun tof excess contribution to be refunded to HCE Part. A:
The total amount of excess contribuiton that must be refunded is $4,700.
HCE deferrals:
HCE A 9,500
HCE B 8,600
HCE C 4,700
Answer is 2,800. Need explanation.
david shipp
May 28 1999, 05:29 PM
reduce highest dollar contributor first and bring him/her down to next highest
-reduce A by $900
reduce next two on a dollar for dollar basis until you either use up excess or get to the third person in line.
- reduce A and B by 1/2 of remaining excess since that eliminates excess before getting to C. So -
A's reduction = $900 + 1/2(4700 - 900) = $2,800.