Sign in to follow this  
Guest GENE

NON CASH CONTRIBUTION TO KEOUGH MPP

Recommended Posts

Guest GENE   
Guest GENE

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.

Share this post


Link to post
Share on other sites
Wessex    0

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

Share this post


Link to post
Share on other sites
Erik Read    0

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 -

Share this post


Link to post
Share on other sites
Guest GENE   
Guest GENE

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)

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this