What ownership is considered in determining 5% owner

A plan participant has 3% stock ownership in the company sponsoring the plan. If you add the stock he is entitled to under their ESOP he would have just over 5%. Would stock ownership under an ESOP be considered in determining who is a greater than 5% owner for purposes of having to take an RMD?

Thanks.

I’ve never needed to think about your question.

But if any beneficial interest under an ESOP might count, perhaps it might matter exactly what rights the participant has under the ESOP’s provisions?

For example, some S corporation ESOPs are designed so even a retiree never can get a delivery of shares, and instead gets only a payment that redeems shares.

I believe the answer to the original question is no.

5% owner status for RMD purposes is defined with reference to section 416.

416 says that ownership is attributed under the rules of section 318 when determining who is a 5% owner.

Under 318, stock is attributed from a trust to the beneficiaries of the trust, except for stock held by a trust qualified under 401(a).

ESOP shares do NOT count for HCE determination.  

8 hours ago, ESOP Guy said:

ESOP shares do NOT count for HCE determination.  

This.  This.  A thousand times, this.