RMD after stock sale

[WCC]

Company A is owned 100% by one individual. Company A is purchased in a stock sale by Company B. Owner of Company A will never be an owner of Company B but will be an employee.

Purchase was effective April 1, 2017. Owner of company A turns 70.5 in 2017.

Company A terminated their plan prior to the sale.

Owner of Company A will take a RMD from Company A's plan for 2017. However, what about going forward regarding assets accrued under Company B's plan? The EOB states (I added the red lettering):

under the key employee definition, an individual is a 5% owner if he/she owns more than 5% of the company (or a related group member - see 1.d.3) below) at any time during the relevant plan year.

Will Company A be considered a related group under the control group rules? Therefore requiring RMD's for the remainder of this individuals employment?

[Lou S.]

Once a 5% owner for RMD, always a 5% owner for RMD.

[WCC]

So the stock sale of a once unrelated group triggers a related group and therefore RMD's forever? 

 

[K2]

The determination of 5% owner status is made in the plan year that ends within the calendar year in which the person turns 70-1/2. I assume this is a calendar year plan.  Under the top heavy rules, is this person a 5% owner in 2017?  Yes.

So, as Lou said, once a 5% owner, always a 5% owner.