IRS Issues Guidance for Retirement Plans on Tradable Employer Securities

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

IRS releases Notice 2011-19, offering guidance to certain retirement plans on when employer securities are “readily tradable on an established securities market” or “readily tradable on an established market.” Employee stock ownership plans are qualified stock bonus plans that invest primarily in qualifying employer securities. Tax code Section 409 provides the qualification requirements for ESOPs, with different requirements for registration-type securities and for those not readily tradable on an established securities market. These requirements affect plan distributions, voting rights, and diversification of investments.

Request Daily Tax Report