BG5150 Posted March 2, 2016 Share Posted March 2, 2016 PS Grouping method: Owners in own group. All others in a single group. 4 owners at 25%. Son of one of the owners is a participant. Is he in his own group? Or with all others? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
ETA Consulting LLC Posted March 2, 2016 Share Posted March 2, 2016 This is purely an interpretation issue. Some "Plan Administrators" may interpret "Owners" to mean direct owners and place the son in the group with all others. Some "Plan Administrators" may, instead, interpret Owners to include owners by attribution. They key here is that any Plan Administrator is not required to have the best interpretation, but merely a reasonable interpretation; and I'm assuming the plan's provisions have authorized the Plan Administrator as the authority in interpreting the plan's provisions. In the IRS's eyes, they don't what such interpretation to be arbitrary and capricious. Good Luck! CPC, QPA, QKA, TGPC, ERPA Link to comment Share on other sites More sharing options...
My 2 cents Posted March 2, 2016 Share Posted March 2, 2016 Does the plan itself provide a definition of "owner" sufficient to make the status of the owner's son unambiguous? It should. Always check with your actuary first! Link to comment Share on other sites More sharing options...
Doghouse Posted March 2, 2016 Share Posted March 2, 2016 Usually such provisions are just blanks that are filled in by the adopter. We always try to use the term "direct" shareholder or owner to eliminate the ambiguity - especially when all the "owners" are lumped into one group. Without that distinction, it's a great way to fail a test. Mike Preston and ETA Consulting LLC 2 Link to comment Share on other sites More sharing options...
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