Insolvency Worksheet

[peggysioux]

How do you determine the interest in a pension plan. Taxpayer is in the Carpenters Trust Fund and will receive $972 per month when he retires. How do I determine the amount to put on insolvency worksheet? Would I take his monthly estimated benefit times his life expectancy?

[peggysioux]

Insolvency Worksheet

Or would the pension be included in the insolvency calculation at all if he had no access to the monies in the pension plan until he retires.

[taxea]

It isn't his until it is his. Is he being paid the interest yearly or does it remain in the fund? Did he make contributions to the plan or are they all by employer? Is he of age to take distributions from the fund?

[peggysioux]

Insolvency Worksheet

It is a pension that the carpenters pay into based on their hours worked. The carpenters vote on how much per hour they as a whole want to pay into pension. He is not of retirement age so can't receive anything from pension unless he is deemed disabled and then he would begin receiving a monthly pension. But he would never be allowed to take a lump-sum for this pension so at the date of cancellation of debt, would his interest in his pension be zero?

[peggysioux]

Insolvency Worksheet

Bringing this back to the top in hopes that someone will respond.

Thanks!

PeggySioux

[peggysioux]

Insolvency Worksheet

I found info that stated the pension needs to be added to assets for the insolvency worksheet computation. However, I now need to calculate the actuarial present value of the accrued benefit. I have been researching and trying to calculate current value and I can not find a simple explanation as to how to calculate. One website stated one would need to hire an actuary. I would not think that tax preparers are hiring someone to work up the present value of a pension plan. Is there anyone who might be able to provide direction? Am I making this more difficult than it really is?? Any direction would be appreciated in pointing me in the right direction to calculate the current value of the pension. Taxpayer is 51 years old and can begin taking pension at 65 and his monthly pension would be $972 per month.