Guest Michael Anderson Posted November 30, 2001 Posted November 30, 2001 We have a standardized 401(k) Plan with 7 employees. The Father is the sole owner of the company. He is 82 years old and does not take a salary. His son and daughter work in the business, but they are NOT owners. They both make around $30K/year. There plan will begin on 1-1-02. Are they attributed ownership under attribution rules. Are they considered HCE in regard to ADP testing? Any help with this would be greatly appreciated. Thanks! Mike
Guest GregSelf Posted November 30, 2001 Posted November 30, 2001 Look at IRC Sect. 318(a). "For purposes of deteriming ownership, an individual is considered as owning the shares of stock owned by his or her spouse, children, grandchildren, and parents...". I think the kids are HCEs for testing purposes.
R. Butler Posted November 30, 2001 Posted November 30, 2001 They are definitely HCE's for the reason GregSelf indicates.
Guest Michael Anderson Posted November 30, 2001 Posted November 30, 2001 Thanks for your replies, I appreciate it! Mike
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