family attribution

[Guest RBeck]

I'm new to Quantech/Relius and I've got a situation where I need to code a father and son as key employees. I've indicated in the census data that the son is an officer, and that the father is an officer and 100% owner. Both are HCEs, not that that makes a difference for TH testing...

The son shows up as a Former Key in the TH test.

What am I not doing to make this work?

[pmacduff]

You can code the son as 100% owner also, (Relius accepts this coding; ie., two people with 100% ownership) then the son will show as key.

[Guest RBeck]

Thanks, pmacduff - I did try that, but it didn't work for some reason, so I coded both the father and son as 100% owners and included them in a family group.

[Guest D Szuhay]

I have contacted Relius on this issue and this is my understanding.

Relius does NOT do family attribution. Therefore, for proper determination of HCE status and Key Employee status, you must enter percentage ownership values for all family members who are affected by IRC Section 318 family attribution whether they own stock or not. Either the total shares of stock will be over 100% or people will be given stock that do not actually own that stock. The system does not do family coding.

[Guest RBeck]

It must do family coding, because I did not put an ownership % in the son's census record. I linked him to the father under family code, and both are showing as key employees. For whatever reason, the system recognizes the son as a key employee with the family code.

[Guest D Szuhay]

I understand what you are saying. However, when I contacted Relius on how to code for husband and wife (Version 6 SP6 help was silent on this issue) they told me not to use family coding and to give all affected family members ownership percentage values.

Concerning your status determination issue, if this was a takeover plan, did you correctly code HCE and KEY fields with prior year's KEY and HCE determination. I do not know if this was your problem, but it could be. I know that coding for prior year HCE status in a takeover year can be tricky.....

Dan Szuhay