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Funding obligation with property

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We set up a DB plan for a sole proprietor who is on extension for 2023.  Not surprisingly, the accountant is asking whether his client can contribute property instead of cash to fund the pension obligation.

I have not run across this question in years, I doubt this can be done without raising a red flag to IRS and am looking for a cite.  

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No can do. It's a prohibited transaction.

Commissioner v. Keystone https://supreme.justia.com/cases/federal/us/508/152/

DOL interpretive bulletin 94-3 https://www.law.cornell.edu/cfr/text/29/2509.94-3

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.

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Several relevant discussion threads available, using the Search feature above. Good search words will include "property" or "kind" or "in-kind".

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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