Match made in Employer Securities

[M R Bernardin]

How does an employer determine the cost basis, to the plan, of an annual match made in the form of employer securities after the plan year has closed? For example, an employer contributes shares as a match on 4/30/99 for the plan year ended 12/31/98. Is the plan's cost basis based on the fmv of the shares as of the date contributed (in this case, 4/30/99), or can the employer use the fmv of the shares as of 12/31/98? Would the answer vary if the shares being contributed are treasury stock, rather than shares purchased on the market by the employer and then contributed to the plan? Finally, if each participant's interest in the stock is tracked on the basis of "units" rather than "shares," how is net unrealized appreciation determined (i.e., does unitization mean the shares have not been allocated to participant accounts for purposes of determining net unrealized appreciation?)