To BenefitsLink Home Page
To EmployeeBenefitsJobs Home Page
Get the BenefitsLink app for iPhone and iPad LinkedIn
Twitter
Facebook
Search the News


Featured Jobs
Managing Director - Retirement Services
Plan Administration/ Employee Benefits/ Sales Support
Benefit Group: Sales Manager
Retirement Plan Administrators
Legal & Compliance Specialist
Conversion Manager
Conversion Consultant
Plan Consultant
Documents Coordinator
Relationship Manager
Plan Administrator II
Actuarial Consultant
Conversion Specialist
Retirement Leaders
ERISA Attorney
Account Manager
Salesperson
Search all jobs
 

 
 
 

Jump to content


Photo

NON CASH CONTRIBUTION TO KEOUGH MPP


  • Please log in to reply
3 replies to this topic

#1 GENE

GENE

    Registered User

  • Registered
  • 6 posts

Posted 22 October 1999 - 04:54 PM

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.

#2 Wessex

Wessex

    Registered User

  • Registered
  • 95 posts

Posted 22 October 1999 - 06:42 PM

No. There is DOL guidance (not regulations) that this is a prohibited transaction. Sorry, I don't have a cite.

#3 ERead

ERead

    Moderator

  • Moderator
  • 198 posts

Posted 22 October 1999 - 07:35 PM

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 -

#4 GENE

GENE

    Registered User

  • Registered
  • 6 posts

Posted 26 October 1999 - 04:07 PM

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)