Guest GENE Posted October 22, 1999 Share Posted October 22, 1999 HOPEFULLY SOMEONE CAN HELP ON THIS ONE. I HAVE A C CORP CLIENT WHO SEVERAL YEARS AGO TOOK STOCK OPTIONS FROM A CUSTOMER IN LIEU OF CASH FOR SERVICES. THE CLIENT WOULD LIKE TO ASSIGN THE OPTIONS TO THE COMPANY RETIREMENT PLAN INSTEAD OF MAKING A CASH CONTRIBUTION TO THE PLAN. THE OPTIONS HAVE AN EXERCISE PRICE OF $3.50 PER SHARE AND THE STOCK IS PUBLICLY TRADING AT $63.50. CAN THE OPTIONS BE ASSIGNED TO THE MPP AS A CONTRIBUTION AT $3.50 PER SHARE. PLEASE CITE ANY APPLICABLE IRS REGS. Link to comment Share on other sites More sharing options...
Wessex Posted October 22, 1999 Share Posted October 22, 1999 No. There is DOL guidance (not regulations) that this is a prohibited transaction. Sorry, I don't have a cite. Link to comment Share on other sites More sharing options...
Erik Read Posted October 23, 1999 Share Posted October 23, 1999 I would have to agree that it isn't allowed - one item for contention would also be if the plan allowed "Property" as a contribution, most plans don't allow that type of a contribution. The other point would be that the employer would then be taking a deduction for income from a prior period of time... I think he's out of luck, and will have to make what ever required contributions there are for the year in cash. If you find something to the contrary though - please be sure to post it so as to enlighten the rest of us. Thanks - __________________ Erik Read, APR CKC Link to comment Share on other sites More sharing options...
Guest GENE Posted October 26, 1999 Share Posted October 26, 1999 I found that the contribution of unencumbered employer property by the employer would constitute a prohibited transaction under IRC ss. 4975 (See CIR vs Keystone Consolidated Industries) Link to comment Share on other sites More sharing options...
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