JustMe Posted June 26, 2020 Posted June 26, 2020 I want to make sure I'm understanding the Prohibited transaction/disqualified person plan rules correctly. If I have a client where the ownership is as follows: A - 40% B - 40% C - 20% A & B are siblings and not related to C. A & B own interest in property (the same property) in their individual 401(k) SDB accounts. They want to sell the property. Since they aren't related and neither own more than 50% of the company, are they disqualified persons? Assuming not, can they personally buy the property from the plan to remove the investment?
JustMe Posted June 26, 2020 Author Posted June 26, 2020 Never mind. I just answered my own question. 10% ownership kills this transaction! Good thing it hasn't happened yet! (H) an officer, director (or an individual having powers or responsibilities similar to those of officers or directors), a 10 percent or more shareholder, or a highly compensated employee (earning 10 percent or more of the yearly wages of an employer) of a person described in subparagraph (C), (D), (E), or (G); or (I) a 10 percent or more (in capital or profits) partner or joint venturer of a person described in subparagraph (C), (D), (E), or (G). Luke Bailey 1
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