James Shen Posted July 8, 2024 Posted July 8, 2024 Question for the team: My client is a small business. The father started the company and transferred 100% of ownership to his two sons in 2016, splitting the ownership 50/50. In 2016, the Father was 68 years old. In 2018 (or 2019), the Father started his RMDs, even though he is still employed and no longer a 5% owner. The Father is still getting RMDs but doesn't want them since he doesn't need the money. Would someone be able to help me with this situation? Can we stop the RMDs since he is still employed but no longer a 5% owner? I believe he was erroneously left as an owner on the year-end questionnaire in 2016 because the previous plan admin did not understand the ramifications of not updating the ownership. I'm not sure if you can stop an RMD, once it has started, even though it was a mistake to begin with. I'm also unsure of attribution rules since his sons are now the owners. I would appreciate any help! Thank you!
Popular Post Lou S. Posted July 8, 2024 Popular Post Posted July 8, 2024 §401(a)(9) sends you §416 which sends you to §318 for attribution which is used for RMDs. For purposes of the RMD rules he owns the stock of his children, just like HCE determination. It is different for Controlled Groups but be happy the RMDs were properly done and you don't have to go back for missed RMDs under VCP. CuseFan, Bill Presson, Luke Bailey and 2 others 5
James Shen Posted July 8, 2024 Author Posted July 8, 2024 Thank you Lou! I thought it might be something along those lines!
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