Partner wants to transfer stock from personal fund into 401k for his deferral.

[jkharvey]

One partner wants to make his elective deferral deposit by transferring title of assets in his brokerage account to the 401k plan. I understand about required contributions having to be made in cash. Seems to me that a deferral is a required contribution in one respect. Would this be permissable? Thanks.

[QDROphile]

1. Such a transaction would not be a deferral. A deferral applies to compensation not yet received.

2. If 1 did not apply, without an exemption the transaction would be a prohibited transaction. An individual exemption would probably be prohibitive.

[Peter Gulia]

Beyond the concerns QDROphile identifies, does the inquiring partner think that the transfer he proposes avoids taxes on his disposition of his securities?