Administrator/Consultant (DC and DB) TPA Professionals
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Kentucky Trust Company
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Jr Retirement Plan Administrator/ Administrative Assistant Hochheiser Deutsch & Co, Inc.
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EPIC: TPA/DPS
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Employee Benefits and Executive Compensation Associate Attorney Verrill
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Retirement Plan Legal Specialist Pentegra
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RTD Financial Advisors
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Trucker Huss, A Professional Corporation
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Retirement, LLC
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Retirement, LLC
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Retirement Plan Relationship Manager ERISA Services, Inc.
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Bates & Company
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Employee Benefits & Executive Compensation Associate Attorney Polsinelli PC
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Plumbers Local Union No. 1 Benefit Funds
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Carpenter Morse Group
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Farmer & Betts, Inc.
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Nicholas Pension Consultants
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Pentegra
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EPIC Retirement Plan Services
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Retirement Plan Documents Specialist Loren D. Stark Company
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Retirement Plan Administrator (TPA) Retirement Plan Consultants
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Question 39: Your Q&As regarding options make an assumption that options to purchase stock directly from the corporation (i.e., the corporation issues stock if the option is exercised) are taken into account under attribution for controlled group purposes. Have you considered whether the exclusion of treasury stock (see IRC 1563(c)(1)(B)) mean that the shares subject to this type of option might not be counted? If you do believe such shares are counted, do you assume that all individuals would exercise their option in determining whether a controlled group relationship exists after option attribution is taken into account? |
Answer: The attribution rules treat the holder of an option as though he were the owner of the underlying stock. So, suppose X Corporation gives Jill an option to buy 5000 shares of X stock. Jill is deemed to own those 5,000 shares. Now if Jill owns those 5,000 shares, the corporation doesn't, so under attribution they are not treasury stock. So, yes, those shares are counted. |
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
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