401(k) RMD (while still working)

Submitted by ShipsnGiggles on Tue, 2015-12-15 14:29

78 old 401(k) participant – non-5% owner – still working
participant is the father of the owners (his two sons each own 50%)

Can he defer RMDs until retirement? or is he required to take an RMD due to atribbution (his son’s owning the business sponsoring the plan)?

Thank you



Submitted by Alan - IRA critic on Tue, 2015-12-15 17:35

Attribution rules apply. Has this been overlooked for prior years?

5% owner and the family attribution rules A 5% owner is an individual who owns more than 5% of the employer. Family attribution rules apply, i.e., the ownership of a company can be attributed to and from other family members. According to Internal Revenue Code Section 318(a)(1), an individual is considered to own stock that is owned, directly or indirectly, by or for his or her spouse,* parents, children (including legally adopted children and regardless of age), and grandchildren.



Submitted by Stephen Csenge on Tue, 2015-12-22 16:41

Thanks for the reminder, but no problem as the company is a large S&P 500 company and client does not own even 0.0005%.



Submitted by Alan - IRA critic on Tue, 2015-12-22 16:51

Is last post on this thread made to the correct topic?  If the sons own 100%, that ownership is attributed to the father, and father is then treated as a 5% owner and must start RMDs at 70.5. 



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